New Tesla Motors Inc (TSLA) Feature Fails to Inspire Wall Street

Tesla Motors Inc (NASDAQ:TSLA) CEO Elon Musk made an ambitious prediction on Twitter, but investors don't seem to care

Jan 11, 2016 at 11:30 AM
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Tesla Motors Inc (NASDAQ:TSLA) CEO Elon Musk is at it again. The electronic car producer revealed a new software update called "Summon" that allows the Tesla Model S to park itself. The feature will also eventually give the cars the ability to start, drive, and meet the driver at a desired location, via a smartphone. To display the potential of this service, Musk took to Twitter, where he suggested the "Summon" feature could one day allow a Tesla vehicle to drive itself across the country to meet a driver. 


Musk isn't the only one with high hopes for the stock, though. Option traders have been betting bullishly, judging by TSLA's 10-day call/put volume ratio of 1.35 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Not only does this mean 1.35 calls have been bought to open for each put over the last two weeks, but the ratio also tops 84% of all others from the past year, meaning call buying has been more popular than normal of late. Maybe these speculators were anticipating big news from the company ahead of this week's Detroit Auto Show. 

In today's trading, call volume is again accelerated. However, the most popular option is the January 2016 215-strike call, which appears to be seeing sell-to-open activity. This means speculators are betting on TSLA to trade below $215 through week's end, when front-month options expire. 

On the ratings front, analysts have taken a glass-half-empty approach to the stock. Eleven of the 16 brokerage firms tracking the shares say they're a "hold" or worse. However, TSLA's 12-month price target of $288.13 still stands at a 40% premium to current levels. 

Today, Wall Street doesn't appear too impressed with Musk's ambitious prediction. Tesla Motors Inc (NASDAQ:TSLA) has dropped 2.6% to trade at $205.52. Looking back, it's been an up-and-down ride for TSLA shareholders, with the stock bouncing between $205 and $240 since mid-October. 

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