Tesla dropped 18% this week. Missed earnings. Burned through cash. The stock chart now looks like a SpaceX rocket after the engines cut out.
Retail traders who bought at $450 are currently refreshing their Robinhood apps and googling "can I sue Elon for emotional distress." The answer is no. The follow-up question is "how do I explain this to my wife." The answer is you don't.
SpaceX shares fell too, which is impressive given they don't trade publicly. Someone out there holds private SpaceX equity and watched it drop right before a Starship test flight. That's the financial equivalent of your girlfriend breaking up with you the morning of your birthday. Except your girlfriend is a rocket ship and your birthday is a controlled explosion in the Gulf of Mexico.
The earnings call featured terms like "negative free cash flow" and "below expectations." Wall Street analysts nodded gravely and downgraded their price targets. Retail traders heard "temporary setback" and "buying opportunity." One of these groups gets paid to be wrong. The other pays for the privilege.
Chart analysts are now drawing lines connecting the current price to support levels that haven't existed since 2022. They call this technical analysis. Normal people call it connect-the-dots for adults who never developed other skills.
Musk's net worth dropped by tens of billions this week. He will recover by Tuesday. Your cousin who bought Tesla calls will not recover until his next paycheck, which he will also lose on Tesla calls.
The Starship test flight happens soon. It will either succeed spectacularly or explode spectacularly. Either way, someone on Twitter will explain why it's bullish.
Photo by nader saremi on Unsplash
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