TSLA - Tesla Motors

[Dassets]

Dassets will be doing well on his short if he kept it. The price is low enough for me to start accumulating again. It will be interesting to see if Elon's latest rantings do turn off left wing car buyers. Twitter is certainly full of hate for him from an even larger contingent than usual.

Too easy, I researched what the insti movements were, they were not and are not buying. The other thing Elon, via his selling, has injected a lot of tradable stock into the mix. He has actually cashed up lots given the tax treatment of the donated stock. I sort of thought he would pull from Twitter. The next result will be bad. Bitcoin loss, costs up, production down from expectations. And another 3 months the competition get closer. I will say it now. When I have been looking at it I cannot get much more than $100 a share.

[Walter]

Thanks Dassets, interesting perspective. My back of the envelope calculations show them earning $12 a share next year. If I'm correct, at $100 a share they would be on a PE of 8. This would be for a debt free company growing at 50% per year. I've not allowed anything for their energy, humanoid robot or driving software.

[Walter]

How much did they lose on their Blatcoin blitz or did they get out before it got flattened recently ?

Diddly squat, they might have to mark it down by a few hundred million. The lockdowns in China are much more significant.

[Joshuatree]

So you've topped up Walter,what's your average price now? I'm not int buying into a downtrend but will watch it.

[Dassets]

Thanks Dassets, interesting perspective. My back of the envelope calculations show them earning $12 a share next year. If I'm correct, at $100 a share they would be on a PE of 8. This would be for a debt free company growing at 50% per year. I've not allowed anything for their energy, humanoid robot or driving software.

I will tell you where I am coming from. First up the diluted number of shares is 1,157 m shares, accounting for the further 12% or so of vested and in the money options. BTW that is after 10% has already been vested and sold by the CEO, Chair, other directors and execs. That is right they have cashed out around $100b this year alone. I am looking beyond next year btw to the long term business but it doesn't make much difference because I think we will see the trends anyway and that will begin to be reflected in share price. The two big problems for me are 1. costs 2. the effect of competitor action. 1. is easy. 2. for me means the margin currently being enjoyed at about 150% above Toyota(one of the best) will inevitably revert to industry. Why? Because the industry is launching 45+ EVs this year(vs 0 for Tesla) and by doing that the industry will inject their margins into what has been a very limited and insulated market. Sales growth sorry I dont buy the forecasts with the competitor product available. Tesla is meant to sell 2.25M cars next year without a small budget offering or SUV(in the US vital). With 3 or 4 models is just isn't going to happen. There are only about 4-4.5 pax cars sold in the US- each year. BYD is killing Tesla in China. Tesla doesn't sell in Africa or South America. Tesla is a niche company with a high end niche product. Now it could launch a couple of models next year but the competitors eg F150 and GM, Range Rover is already playing in the sandpit. So I see peak production early for them and margins compressed. A simple formula. BTW I have seen almost all the analysts of a well covered company be wrong before. The classic was Telecom(now Spark) on the way the market looked at mobile. Everyone but one sole analyst had profits improving and big rev growth including fund managers like Capital Group who owned 10%. Telecom got near to $10 before dropping to near $2. That analyst worked out the rev forecasts were impossible unless the consumer cut back on food, housing or energy. People thought I was crazy until it started. I had some interesting discussions after that with Teresa.

Hey I could be wrong about Tesla but to me it doesn't pass a basic sniff test in terms of can this happen(world domination and maintenance of never seen before margins) .

[Walter]

Thanks Dassets
Their new factories seem very efficient. VW CEO Herbert Diess says Tesla can make a car three times faster than than VW can.
Don't forget the legacy makers outsource many things, leave margin for dealers and spend up big on advertising. Tesla also makes margin on software and is moving into insurance.

In addition I think it is the whole car market up for grabs, not just the BEV demand. Legacy is slow to ramp, the Koreans make great cars, but small numbers. The Chinese are ramping well and will undermine the low end in Europe given the chance. Tesla still outsells BYD in China in the pure BEV format, that might change this year. I'm confident they can get to five million annual sales, cynical they can get to twenty million.

[Walter]

So you've topped up Walter,what's your average price now? I'm not int buying into a downtrend but will watch it.

$383, hurt by buying a few months ago LOL.

[pedro.nz]

Great to have the opportunity for a short term trade today - up 7.43%
And up another 0.74% after hours
NASDAQ also up in similar fashion at 2.68%
Will be interesting to see where it heads tomorrow and whether the low of US$620.57 on the 24th May ends up being low point for now.

Screenshot 2022-05-27.jpg

[pedro.nz]

And up another 7.33% today plus another 0.7% after hours to $765.25

[Walter]

There is another hidden profit centre source for Tesla. Vehicles on three year leases are starting to be returned to Tesla and become available for resale . Because of the crazy used car market in USA the market value for these cars is much higher than their book value, there is speculation this will be worth $billions over the next few years. The story goes that Elon had thought they would have solved FSD by now and wanted the cars for robotaxis. Elon still thinks they will solve FSD this year, many think he is in lala land. Either way, it seems like a financial win.