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Slow Down -- Tesla Curves Ahead

Tickers in this article: FSLR TSLA
NEW YORK (TheStreet) -- Henry Blodget refers to Tesla as "a great American Success story." I wish I could share Bloget's sentiments.

Millions of taxpayer dollars subsidized the company and some key electric vehicle part suppliers. I'm not a fan of centralized planning or the government picking winners and losers.

Some will claim the taxpayer money was a good investment if Tesla eventually becomes self-sustaining. That's equivalent to your friend coming back from Vegas bragging about the $10,000 slot machine jackpot. What the friend almost nevers tell you is he or she spent $20,000 to win it. Not only is the path to successful government subsidies paved with the sweat and toil from productive taxpayers, it's insulting.

United States is a world leader in free-flowing capital markets. Does anyone still genuinely believe people with nothing to lose and no skin in the game are able to allocate resources better than those who own the capital? The only winners are government bureaucrats who maintain their high-paying government jobs by touting the "$10,000 slot wins" as their rationale for collecting a paycheck.

With that said, I hope Telsa is successful enough that the cars are exported and the company helps to grow the economy. We will never know if Tesla could have been successful without taxpayer money, and that's a real shame because it leaves room for doubt in the ability of American companies to succeed on their own.

For now, the real question that needs addressing is whether or not Telsa is a smart investment.

Everyone loves a short squeeze -- well everyone except short sellers. More than one neck snapped during the last few trading days in Tesla as America's newest automaker burned rubber from $56 to an intraday top of $87 a share in under a week.

What makes Tesla especially intriguing is the massive short interest at almost 50% of the float. You just can't reach a short interest level that high in a multi-billion-dollar company unless the brightest on Wall Street think a given stock is overpriced and will soon depreciate considerably.