Tesla Is a Cult Stock, Jim Cramer Says

With the first Model 3’s expected to make their way into consumer driveways today, check out the specs that have Tesla (TSLA) fanboys excited. When are you picking yours up?

How to Trade Tesla Around the Model 3

The company’s stock has fallen the week and month after both of the last two Tesla release cycles.

The day after the first ten Model S vehicles were delivered on June 22, 2012, Tesla stock dropped almost 2%. By the following week, the stock had fallen almost 10% — closing at precisely the same level three weeks later, a month after the first delivery.

When the Model X was delivered in September of 2015, the stock initially staggered upward a cool 0.71%. By the next week, the stock was down 8%. Three weeks later, the stock had fallen another 6 percentage points, sitting 14% lower than the day the cars met their drivers.

The classic stock market wisdom is that investors should buy on the rumor, and sell on the news. With the release of a new vehicle, the narrative playing out in the news can tend to shift.

“I would think it is the sense that investors have a hype around the launch of the vehicle and then the narrative around the stock shifts to execution risk of production,” Cowen & Co. LLC senior research analyst Jeffrey Osborne said.