Tesla Stock Sinks After Musk Drops Private Bid

TSLA stock has had a volatile month

Aug 27, 2018 at 9:48 AM
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Another day, another round of headlines swirling around electric carmaker Tesla Inc (NASDAQ:TSLA). Today's news is centered on Friday's announcement from Tesla CEO Elon Musk, who said "the better path is for Tesla to remain public." This followed a tweet from Musk earlier this month that suggested he was considering taking the company private -- a post that sparked an investigation at the Securities and Exchange Commission (SEC).

Against this backdrop, TSLA stock is trading down 2.1% at $316 -- testing its 200-day moving average, which emerged as a floor late last week. Tesla's price action has been choppy this month, with the stock in a range as wide as $290-$387. In fact, the equity's 30-day historical volatility of 81.5% ranks in the 98th percentile of its annual range. The shares are still holding onto a comfortable 6.9% month-to-date gain, though, after plunging more than 13% in July.

Options traders have been blasting Tesla stock, too, with 2.03 million calls and 1.35 million puts currently outstanding -- in annual-high territory. However, it's been put buyers who have been busier-than-usual across the major exchanges, as evidenced by TSLA's 10-day put/call volume ratio of 1.15 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which registers in the 97th annual percentile.

This skepticism is seen outside of the options pits, as well, with nearly 28% of Tesla's stock sold short -- or 5.2 times the average daily pace of trading. Plus, 11 of 16 analysts maintain a "hold" or worse rating, and the average 12-month TSLA price target of $323.33 is just above the security's current price.

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