Tesla stock: Hot or not?
Stuart Frankel's Steve Grasso argues that perception has made Tesla stock hot.
By Bruno J. Navarro
With a year-to-date gain of 190%, shares of Tesla Motors (TSLA) drew heated sentiment from the "Fast Money" traders Wednesday.
OptionMonster's Jon Najarian wasn't buying it.
"I don't know why you wouldn't love this stock," he said. "Look, in May the sales were down, the car sales were down about 15%. What's wrong with that? Or a 95 forward P/E. Or the fact this they lose about 30% on every car. What's not to like?"
On CNBC, Najarian said that the one good number was in the short interest, around 24%.
"You look at the volumes of trade here, too, 37 million shares in one day," he said. "I believe there were 14 out of the 20 days in May that this thing traded north of 15 million."
Tesla shares were up 0.42 percent to $98.4 before close on Thursday.
Stuart Frankel's Steve Grasso argued that perception has made Tesla stock hot.
"Have you ever seen anyone able to glamorize electric cars the way Tesla has? No," he said.
While that alone wasn't enough to create a viable company, Grasso added it provided momentum for the company and its founder, Elon Musk.
"It gets you over the hump," he said. "Now he starts making a better battery, a better car, gets more people to buy the car. Now he starts a lot of hoopla that everyone wants to buy the car."
Mike Khouw of Dash Financial didn't see Tesla as a "buy."
"I hate the stock, absolutely," he said. "I can't understand how on earth somebody could just simply say, all right, just because they have built a hot car that necessarily means I want to invest in a hot stock."
Khouw said that he didn't see any rational explanation for buying shares of Tesla.
"Ultimately, you buy stocks because you hope they're going to go higher and you hope that based on fundamentals, and there's no fundamentals here whatsoever and even the most optimistic has trouble getting it."
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After enjoying a smooth rise in stock prices since May, investors are about to be hit with another bout of volatility.
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