Tesla: Opportunity to invest with low strike levels

The shares of Tesla fell by 9.3% after it missed both earnings and sales expectations for the quarter. 

In a conference call following the earnings release on Wednesday, Musk repeatedly mentioned the impact of high interest rates on consumer confidence. The company reported its first quarterly fall in sales this year, while margins fell to the lowest in over four years after the company repeatedly cut prices for its cars. 

Despite its struggles, Tesla maintains that it will put 1.8 million customers into new vehicles by year-end. Tesla remains the most valuable vehicle producer in the world and said it will deliver its first long-awaited Cybertrucks in November, about two years behind schedule. The recent stock price correction currently provides an opportunity to invest in a yield enhancement structure such as a Callable Reverse Convertible with a low strike price which is approximately equal to the stock price of Tesla at the beginning of the year.

Source: Bloomberg (2023)

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