Tech stocks are always on my mind but there are a few names that are dominating my screen today. Let's go over what I am seeing and why it is important to investors.
Ocwen Gets Hammered
Ocwen Financial (OCN) is down around 55% as I write this following a cease and desist order to Ocwen Loan Servicing. This small cap financial services company has seen volume of about 29M shares so far today, but that is well 124M outstanding.
The stock has been halted a few times, as investors continue to struggle to find a floor for this stock.
The lesson here is that when 20 states give you a cease and desist order, be ready to take a big loss.
The halts allowed a few buyers to organize, but selling still look to be the order of the day for this stock.
CNET is reporting that approximately 53K Tesla (TSLA) Model S and Model X cars are seeing a voluntary recall. About 31K of those are located in the US and the recall is for cars made between February and October of 2016.
TSLA has been in the news quite a bit and I recently wrote about how I expect the stock to go to $450 . With earnings a few weeks away the bears might have achieved a toe hold in the idea of TSLA not executing perfectly on its plan.
Recall that more than 20% of TSLA stock is sold short and most are pointing to the valuation. Some have mentioned that even if TSLA were to be making money their multiple would only be what other car company's sport (around a 5x-10x multiple). The bulls however don't seem to mind that they are paying more for growth.
Sometimes when the sellers hammer a stock they believe it is going to $0.00 and that might be the case with OCN. Other times, there are buyers just waiting for a stock to give back some ground so they can get in. Since I believe that TSLA is headed to $450, I would be a buyer on this weakness.
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