VW introduced an emissions defeat device and as a result has issued a recall. I don't think this is an investing opportunity, but it probably is a trade. Since wrong doing has been admitted, board members are resigning, and action is already being taken the uncertainty is "how bad is it" rather than "is it bad?"
If we discount the cost of the recall, fines, and disruption of the departing management I think VW (OTCMKTS:VLKAY) will be fine. But I have no way to place an evaluation on those named costs. Also, it was already on a downward trend so a rebound is unlikely to come in the short term.
If I did pick up shares, and I wouldn't, I'd look to sell at $36 and buy at $15 to $18.
The real opportunity here would be to look for other major sellers of Diesel engines, perhaps Mercedes, and see if there is an anomalous drop associated with the news. That would be the real opportunity. Unfortunately, Mercedes (NASDAQ:MERC) also doesn't have good looking chart performance so that wouldn't be the option to choose. MACK Trucks/ Volvo (OTCMKTS:VOLVY) and the like might be another worth looking at, but this is not my area of expertise and I leave finding possible dip & flip candidates as an exercise for the reader.
If we discount the cost of the recall, fines, and disruption of the departing management I think VW (OTCMKTS:VLKAY) will be fine. But I have no way to place an evaluation on those named costs. Also, it was already on a downward trend so a rebound is unlikely to come in the short term.
If I did pick up shares, and I wouldn't, I'd look to sell at $36 and buy at $15 to $18.
The real opportunity here would be to look for other major sellers of Diesel engines, perhaps Mercedes, and see if there is an anomalous drop associated with the news. That would be the real opportunity. Unfortunately, Mercedes (NASDAQ:MERC) also doesn't have good looking chart performance so that wouldn't be the option to choose. MACK Trucks/ Volvo (OTCMKTS:VOLVY) and the like might be another worth looking at, but this is not my area of expertise and I leave finding possible dip & flip candidates as an exercise for the reader.