In the blog post, Musk recommended people in New Jersey who want to purchase Tesla vehicles cross the Hudson River and go to the Tesla showroom in lower Manhattan. Unless New York puts in its own ban on direct sales.
Now, most important:
How will this affect Tesla's stock price?TSLA is a trading favorite among many of my day/swing trader friends and mentors. The volume is strong, the swings are violent and full of fun and trader sentiment is always very clear, making it easy to trade the stock off trader psychology. The abolition of Tesla's car sales in any single state will hurt the company and cut into Tesla's market share. Even though New Jersey only represented a small share of Tesla's total sales, N.J. was still marked as fourth-largest market for luxury automobiles following New York, Florida, and California. Tesla's Model S car can be priced over $100,000 and definitely fits in the 'luxury automobile' category. Now that New York is heavily considering a ban as well, that could have a serious effect on Tesla. New York is the third most populated state in America, with 8.3 million people. In front of New York is California at #1 and Texas at #2. Tesla's stock price has risen 554% over the past year, going from the stock's close on March 21st, 2013 ($36.01) to last Friday, March 21st ($236.50.) No short term damage was done to Tesla's stock price in response to the announcement of the news on March 11th, where the stock price closed at $236.50. I think Tesla's stock may eventually see some short-term affects of a falling stock price, due to the company not being able to make sales how it wants to in various states. However, I think Tesla's new way of selling automobiles will eventually become the new normal. The people of New Jersey have already decided to fight back. Via the political crowd funding platform FundElevator, people are starting to raise money for a lobbying effort against New Jersey and the enforcement of this law. "Tesla is changing the world and keeping American greatness alive. We can't let special interests and political corruption get in the way of that." The consumers have spoken. People love this very innovative way of doing business and I think as the younger generation moves up, we'll adapt to the changes Mr. Musk is pioneering in our current system. Musk comes from the internet world, a world where there are far fewer contracts, rules, regulations, and middle men. It's a simpler way. I believe it's where we are headed. Go Elon Musk, go innovation, and go the next generation of car sales. #BullishOnTesla Many Happy Returns, Rachel At the time of publication the author had no position in any of the stocks mentioned. This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.