In all companies there is both good news and bad news circulating around them, most of us want to hear the good news aspect. The company had a good quarter, there are headwinds, but the management team is dealing with it and the company should be able to progress in the correct manner. Every once is a while, the bad news seemingly is more important, for example Tesla. The company has been a high flying one and is founder Elon Musk has been the leader in electric cars, solar panels, and rocket ships – there is a wonderful story. In a column by Brandon Kochkodin  of Bloomberg News, Tesla stock is taking in on the chin for trailing expectations and facing new investigations.

In all high flying stories, there are short sellers who expect the stock to fall but if the company meets or beats expectations, a company such as Tesla can be worth more than GM in stock market valuation. Recently Tesla has been not beating expectations as production of cars falls below – they were suppose to make 2,500 Model 3 (the $30,000 electric vehicle) a week, production is running at below 1,000 or 975. This can be due to a number of factors – one is shoppers with great intentions are not buyers or it could be due to logistics in running a complex production line. We do not know at the momemt.

We do know there was an accident with a Tesla and maybe its driver assistance system Autopilot was on. If it was on and the driver did not watch – these are early adopters and maybe the driver was silly. It could have been a regular vehicle accident which happens to every make of car and truck.

One of the measures to examine the vehicle company is the bond market because all manufacturers must sell bonds to produce their products. If the company is doing well and the interest and principal are almost a guarantee the bonds trade at or above par. When there is worry, interest rates go up and prices for the company’s bonds go down. Tesla is in this situation. The 5.3% bonds are trading at 87.50 for a yield of 7.5%. If you love Tesla that is a great deal, if not that could be a warning sign.

Tesla spends about $4 billion a year on its operations, while they have a year’s operation in cash or equivalents, some time during the year they will need more money. If sales are up and production is moving – the ride can continue.

Linking to dividend paying stocks, for the most part no news until the quarterly meeting is generally good news. Every company has something which can affect its performance and you need to assure yourself whatever it is – the company can manage or has enough cash in the bank to whether the storm and continue.  One question you can ask the President is what keeps you up at night or your biggest worry?

There are more questions than answers, till the next time – to raising questions.