Tesla Stock Takes Hit on Layoffs, Guidance

Elon Musk's Tesla will reduce its workforce by 7%

Deputy Editor
Jan 18, 2019 at 10:04 AM
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The shares of Tesla Inc (NASDAQ:TSLA) are down 7.5% at $321.27 in early market trading, after the company announced that it would be cutting the number of full-time employees by 7% in order to reduce costs. The auto concern also said it expects fourth-quarter profit to come in lower than the previous quarter.

This is the second bear gap already for TSLA in 2019; the stock dropped on Jan. 2 after the firm slashed prices of U.S. vehicles. Since then, however, Tesla shares seemed to be in rebound mode, but today they're back to testing their 160-day moving average. 

Analysts have been leaning bearishly on TSLA stock. Eight call it a "strong buy," compared to seven "holds" and five "sell" or worse ratings. Plus, the consensus 12-month price target of $336.32 represents a discount to yesterday's close at $347.31.

Short interest dropped 6.5% in the past two reporting periods. However, the 25.57 million shares sold short still represent almost 20% of the stock's available float.

Echoing that pessimism, TSLA's Schaeffer's put/call open interest ratio (SOIR) of 2.20 indicates that put open interest more than doubles call open interest among options expiring within three months. The ratio sits in the 88th percentile of its annual range, too, suggesting that short-term option players have rarely been more put-heavy in the past year. 

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