Monthly Archives: June 2010

Tesla zooms higher with speed

Tesla Motor’s IPO priced strong yesterday, coming in at $17 per share vs. the original expectation of $14 to$16 per share.  Tesla increased the deal size to 13.3 million shares from the original amount of 11.1 million shares. Tesla Motors manufactures and sells high performance electric vehicles, as well as advanced electric vehicle power-train component parts. Tesla currently has one car on the market called the Roadster. At the end of Dec. 31, 2009, Tesla sold 937 Roadsters in 18 different countries.

The base price for the Roadster sells at a whopping $101,500 and they plan to develop another car called the Model S, anticipating production in 2012 with an estimated target of annual production of up to 20,000 vehicles per year. The perceived belief is the Model S will have a significantly larger customer base than the Roadster. The Model S is much more attainable than the Roadster, starting at $49,500, after deducting the $7,500 federal tax credit for the purchase of alternative fuel vehicles.

Despite the major stock indices getting crushed yesterday Tesla stock sped higher being one of the few bright spots. Tesla stock had another nice pop today trading as high as 79% above the $17 per share IPO price. Any consideration of deploying new money to enter Tesla at this point should proceed with caution.

Stock symbol (TSLA)

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What’s inside an Apple?

Apple released the iPhone 4 yesterday with much-anticipated buzz and fanfare. The Apple tablet called iPad debuted on April 3rd and it’s been reported that 3 million units have already been sold with demand not fading away. On the first day iPhone 4 was available for pre-order the AT &T web site crashed due to the overwhelming response of Apple fanatics invading the site. Conservative estimates on how many iPhone 4 units were sold on the release date was 600,000 units, well ahead of Apple’s prior new product launches. Three companies that are a big part of the two latest Apple smash hits are SanDisk, Cirrus Logic and OmniVision Technologies.

SanDisk (SNDK) provides the flash storage technology for the iPad and iPhone4.


Cirrus logic (CRUS) develops high-precision analog and mixed-signal integrated circuits for the iPad.

OmniVision Technologies (OVTI) provides single-chip image sensors for the iPhone 4.

These companies are not done riding Apple’s coattails based on the euphoric tone for the iPhone 4 and iPad.

Friday close

Stocks finished the week on a strong note after a disappointing monthly retail sales report had initially dampened hope for an extension to the prior session’s surge. The S&P 500 rallied 3% on Thursday, but action in the early going suggested that participants were interested in pocketing some of that gain. The worst Advance Retail Sales Report in months provided the excuse. Many had expected a modest increase in May retail sales, but they got a 1.2% drop instead. Sales less autos had also been expected to make a slight increase, but they fell 1.1% in their worst drop in over one year.

Stocks got some relief from the preliminary Consumer Confidence Survey for from University of Michigan. The survey exceeded expectations for a reading of 74.5 by improving to a two-year high of 75.5. Business inventory data for April had little impact on trade. As had generally been expected, inventories increased 0.4% for the month. Given the lack of corporate news flow, market participants were left to take their cues from the economic data. However, the conflicting nature of those reports left stocks to trade in a relatively tight range in lackluster fashion for most of the session. The major averages were pushed higher in the final few minutes to settle at session highs, though. The move was likely helped by the light volume, which often makes for more exaggerated swings among stocks. Nonetheless, the Nasdaq netted a gain of more than 1%. That helped it secure weekly gain of just over 1%. For comparison, the S&P 500 tacked on a 2.5% weekly gain and the Dow added a 2.8% weekly gain, even though the gains were moderate this session.

Not much has changed fundamentally in regards to the economic issues in Europe and the skeptical uncertainty with the U.S. economy. Any excitement of a stock market rebound should be met with tepid enthusiasm.

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Empire Avenue

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June starts off the way May ended

June starts off on a weak tone despite an attempt for higher ground. Dow -112, S&P -18, Nasdaq -34, Russell -21. The opening gap down attracted buyers on weakness which lasted throughout the first hour, but the upward momentum waned considerably soon after, resulting in a midday chop sideways that eventually left the door open for sellers to pound prices lower into the close.

One particular group that lagged throughout the day was the Energy complex in response to the continued Gulf of Mexico oil spill. Technically for the S&P 500, look for signs of first support around the 1065/1066 area, followed by 1059/1060 level. Plenty of overhead resistance is now in play starting at 1084, 1094 and 1100.

Europe’s fiscal issues and China’s economic slowdown does not bode well short-term.