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Tesla as an Investment

By Patrick following x   2018 Dec 22, 8:42pm 1,914 views   203 comments   watch   sfw   quote     share    


What do people think about Tesla (TSLA)?

It's over $300, with a loss of $10/share, but revenue just keeps going up. Hard to figure out what a fair price is since it doesn't make money yet.

How would you come up with a fair price per share?

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164   MrMagic   ignore (10)   2019 Jan 2, 7:17pm   ↑ like (1)   ↓ dislike (0)   quote   flag        

kt1652 says
Right, did Amazon make any profit for 10 years until they took over the world.


Amazon is still hardly making any profit after all that time, and it's been like 14 years. They make like a 2% - 3% net profit and are still posting losses overseas. Not sure if you should use them as a benchmark. Don't confuse sales dollars as making money.
165   DASKAA   ignore (4)   2019 Jan 2, 7:20pm   ↑ like (2)   ↓ dislike (0)   quote   flag        

SunnyvaleCA says
If there were money to be made in the electric car business at this point in time, the big car companies would be heavily into electric cars. The fact is that no company at all has made profits in electric cars.

If the battery tech improves and the market becomes viable for profits, I expect many conventional car companies to move in that direction.

What is Tesla's profit "moat"? How do they protect their business so as to keep profits up in the face of competition? So far, Tesla hasn't made a profit even though there is very little in the way of competition.

As for investing in Tesla… I actually did make some money with some puts I bought the day after the infamous Musk tweet. I was thinking of trying that again a month ago, but never got around to it and it looks like I'm late in the game.


Substitute Tesla for Amazon, electric cars for online retail and legacy car companies for brick-and-mortar retail giants and you basically have the case against AMZN circa 2000-2002. People who bought AMZN shares then are sitting on thousands of %% upside. People who insisted on buying WMT only doubled their money over the same period. And people who insisted on buying shares of Sears - lost everything.
166   MrMagic   ignore (10)   2019 Jan 2, 7:22pm   ↑ like (1)   ↓ dislike (0)   quote   flag        

clambo says
The $7500 taxpayer gift per car was cut in half. So, today Tesla says they will cut the price of their cars by $2000 per car to offset the loss of corporate welfare. Tesla just decided to throw away $2000 per car profit to try to maintain sales.


Tesla sales will take an even bigger hit with the tax credits going away. Doesn't anyone remember these two:

..."We have seen similar situations happen with the end of EV incentives before. The best examples being Denmark and Hong Kong which used to be two of Tesla’s best markets. But now they dropped down to be some of the worst markets in terms of sales since they killed their incentives.

We expect a similar albeit not as drastic situation in the US with the likely end of the federal tax credit,

https://electrek.co/2018/08/22/tesla-sales-surge-netherlands-end-ev-incentive/
167   kt1652   ignore (1)   2019 Jan 2, 7:26pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

So, like Buffett, I dont invest in new tech. I made $ on TSLA, almost swayed me to buy a M3. But no, they are too cute and small. I will wait. But the autonomous tech is a game changer. Foolish irresponsible idiots are ruining it for the rest of us. Know its limitations, so we get the next upgrade, fool. It is a must on my next car. Tesla leads, no question.
I invest like WB, so is BYD better? lol
168   DASKAA   ignore (4)   2019 Jan 2, 7:34pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

MrMagic says
..."We have seen similar situations happen with the end of EV incentives before. The best examples being Denmark and Hong Kong which used to be two of Tesla’s best markets. But now they dropped down to be some of the worst markets in terms of sales since they killed their incentives.


IDK about HK, but IIRC in Denmark the incentives on Tesla made it literally half or even third of a price of similar luxury sedans, not some measly $7.5K handout. When gumbint is leveling 180% import tax on BMW 7er or S-Klasse but not on Model S the latter becomes a no-brainer (warts and all). Heck, it makes it cheaper than many much smaller and dinkier ICE-powered cars. Obviously, US subsidies are nowhere near that dramatic so I wouldn't use Denmark covfefe for drastic predictions.
169   kt1652   ignore (1)   2019 Jan 2, 7:46pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

BMW - Broke My Wallet. They are lovely cars, if you can afford them. You like paying 2-3x for everything, be my guest.
170   DASKAA   ignore (4)   2019 Jan 2, 7:56pm   ↑ like (1)   ↓ dislike (0)   quote   flag        

kt1652 says
BMW - Broke My Wallet. They are lovely cars, if you can afford them. You like paying 2-3x for everything, be my guest.


The cheapest electric BMW - i3 - costs $44,500 and is a fucking shitbox compared to the cheapest $44K Model3. Heck, it's not in the same fucking zipcode and it's fucking obvious to everyone.
171   E-man   ignore (0)   2019 Jan 2, 7:57pm   ↑ like (2)   ↓ dislike (0)   quote   flag        

If the stock was attractive at $330, wouldn't it be more attractive at $300? How about $270? ;-)

Kidding aside. Once you have driven a Tesla, you're not going back to an ICE car unless it's a Lamborghini Aventador or Huracan. At least that's for me although I've been eyeing the Nissan GTR as I feel you get more bang for your bucks, but still no. I hate the offing loud sound.

Elon has built a car that people love. I know we're buying a Model Y, and eventually the Roadster. Will Tesla survive long-term? Your guess is as good as mine. I'm putting my money on Elon?

Good luck placing your bet @Patrick.
172   socal2   ignore (0)   2019 Jan 2, 7:58pm   ↑ like (1)   ↓ dislike (0)   quote   flag        

DASKAA says
The cheapest electric BMW - i3 - costs $44,500 and is a fucking shitbox compared to the cheapest $44K Model3. Heck, it's not in the same fucking zipcode and it's fucking obvious to everyone.


I think even the Chevy Bolt is better than the i3.

173   Strategist   ignore (2)   2019 Jan 2, 8:58pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

clambo says
The consumer has rejected battery cars so everything about how great they are is irrelevant.


he he he That's funny. Tesla just can't keep up with the demand. They don't even have to advertise to sell cars. It would be a dream for GM and other car companies to be in that position.
174   Strategist   ignore (2)   2019 Jan 2, 9:01pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

SunnyvaleCA says
If there were money to be made in the electric car business at this point in time, the big car companies would be heavily into electric cars. The fact is that no company at all has made profits in electric cars.


And yet car companies like VW have budgeted $50 billion+ to develop electric cars. All car companies are gearing up to prevent Tesla from eating their lunch.
175   Strategist   ignore (2)   2019 Jan 2, 9:07pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

MrMagic says
kt1652 says
Right, did Amazon make any profit for 10 years until they took over the world.


Amazon is still hardly making any profit after all that time, and it's been like 14 years. They make like a 2% - 3% net profit and are still posting losses overseas. Not sure if you should use them as a benchmark. Don't confuse sales dollars as making money.


And yet it became the 2nd company in history to be worth$1 trillion. Amazon's plans were never to make quick profits. Their goal was market share. It's a wise strategy that made Jeff Bezos the richest man on the planet.
How is is Sears worth?
176   Strategist   ignore (2)   2019 Jan 2, 9:13pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

MrMagic says
Tesla sales will take an even bigger hit with the tax credits going away. Doesn't anyone remember these two:


All car companies lose their credits after 200,000sales in electric cars. Tesla being the first, only reveals it's incredible success.
I don't know where Tesla shares will go in the future, but I do know where Tesla sales will be. High High and Higher.
177   MrMagic   ignore (10)   2019 Jan 2, 9:48pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Strategist says
I don't know where Tesla shares will go in the future, but I do know where Tesla sales will be. High High and Higher.


Wow, you really do drink the kool-aid, don't you.
178   Rin   ignore (3)   2019 Jan 2, 10:14pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Elon's coup will be SpaceX, with it's near monopoly on satellite launches for the next decade or two.

Aside from that, ventures like Tesla are very if-fy. And if you look at investing, then surely, companies which don't give dividends aren't places to park anymore than a sliver of one's portfolio.

Even a simple investment in R J Reynolds yielded one a huge return by reinvesting dividends. And let's be honest, cigarettes have been around for a lot longer than any of us on this earth.


Reynolds America (RAI) prior to the 2008 crisis, date range of Jan 2006 to Jan 2014 ...

179   Blue   ignore (0)   2019 Jan 2, 10:18pm   ↑ like (2)   ↓ dislike (0)   quote   flag        

Currently its a Luxury car play and makes no profits in the near future. I'd see some prospects if it move out from Fremont, CA to more price competitive manufacturing base (unless state is already compensating) or come with some sort of self driving bots technology to make vertical business models. Just to be a passenger car play has limited scope to make profits as the competition gearing up.
181   Strategist   ignore (2)   2019 Jan 3, 10:11am   ↑ like (1)   ↓ dislike (0)   quote   flag        

Blue says
Currently its a Luxury car play and makes no profits in the near future. I'd see some prospects if it move out from Fremont, CA to more price competitive manufacturing base (unless state is already compensating) or come with some sort of self driving bots technology to make vertical business models. Just to be a passenger car play has limited scope to make profits as the competition gearing up.


California is a rotten place for manufacturing. Stupid politicians in Sacramento think it's a bad idea to encourage business. They would rather encourage illegals, welfare queens, and bums. Nevada is much better.
Tesla will soon be manufacturing semi's, trucks, and whatever there is demand for.
182   Strategist   ignore (2)   2019 Jan 3, 10:13am   ↑ like (0)   ↓ dislike (0)   quote   flag        

MrMagic says
Strategist says
I don't know where Tesla shares will go in the future, but I do know where Tesla sales will be. High High and Higher.


Wow, you really do drink the kool-aid, don't you.


It was kool-aid? I thought it was wine. Damn Tesla.
183   theoakman   ignore (0)   2019 Jan 3, 10:50am   ↑ like (0)   ↓ dislike (0)   quote   flag        

Rin says
Elon's coup will be SpaceX, with it's near monopoly on satellite launches for the next decade or two.

Aside from that, ventures like Tesla are very if-fy. And if you look at investing, then surely, companies which don't give dividends aren't places to park anymore than a sliver of one's portfolio.

Even a simple investment in R J Reynolds yielded one a huge return by reinvesting dividends. And let's be honest, cigarettes have been around for a lot longer than any of us on this earth.


Reynolds America (RAI) prior to the 2008 crisis, date range of Jan 2006 to Jan 2014 ...



Speaking of cigarettes, 1 out of 5 kids admits to regularly vaping. I teach high school right now, it's more than that. It's even a problem in the middle school. What's crazy is they are inhaling the equivalent of 4 packs of cigarettes in nicotine per day. Initial studies have shown that vaping at a young age has led to a likelihood to move onto cigarettes. Moreover, they just released a survey and found that 37% of kids didn't even realize they were inhaling nicotine. Anything nicotine related is slated to be a booming business.

10 years ago, I figured we wiped teen nicotine abuse nearly off the map. It's back and bigger than it ever was.
184   SunnyvaleCA   ignore (0)   2019 Jan 3, 11:08am   ↑ like (0)   ↓ dislike (0)   quote   flag        

DASKAA says
Substitute Tesla for Amazon, electric cars for online retail and legacy car companies for brick-and-mortar retail giants and you basically have the case against AMZN circa 2000-2002

Actually, Amazon's profits are from AWS, not online retail.

Amazon's online retail, while getting a first-mover advantage, has several Achilles heals:
• I can browse their online offerings and read the reviews, but then purchase elsewhere at a lower price.
• While previously having an advantage by easily allowing sales tax evasion, here in California (and elsewhere) Amazon now collects sales tax. Their tax evasion benefit is now a tax evasion disadvantage, as it's now only OTHER online sites that offer the feature.
• Much like eBay, they suffer from fraudulent goods and fraudulent 3rd party sellers. I only buy things sold directly by Amazon itself. Amazon can't leverage 3rd party sellers for its own expansion and profits.

Amazon's online retail is really just a convenience. Convenience in one-stop shopping, one-stop payment, and (often) very fast delivery. If they economy crashes and people start tightening their spending habits, I expect Amazon's online retail will not even keep its current break-even (lack of) profits.
185   SunnyvaleCA   ignore (0)   2019 Jan 3, 11:11am   ↑ like (0)   ↓ dislike (0)   quote   flag        

DASKAA says
Substitute Tesla for Amazon, electric cars for online retail and legacy car companies for brick-and-mortar retail giants

Do you realize that Benz, Daimler, Porsche, and many others had hybrid-electric cars well before Musk was even born?

Where's Tesla's enormous patent portfolio? They have nothing to defend themselves if rivals feel that electrics will suddenly become profitable.
186   DASKAA   ignore (4)   2019 Jan 3, 11:37am   ↑ like (0)   ↓ dislike (0)   quote   flag        

SunnyvaleCA says
DASKAA says
Substitute Tesla for Amazon, electric cars for online retail and legacy car companies for brick-and-mortar retail giants

Do you realize that Benz, Daimler, Porsche, and many others had hybrid-electric cars well before Musk was even born?


Um, no, they didn't. First hybrid was Prius and Mask was already adult and millionaire. First German hybrid didn't appear till 2010 iirc. And hybrid-electric is not the same as full-electric. It's a cludge at best. Besides, if these guys are ready to eat Elon's lunch, why BMW's electric offers suck so much and the rest don't have anything at all (well Daimler did have a fully-electric offering based on .... drumroll... Tesla drivetrain).
187   socal2   ignore (0)   2019 Jan 3, 11:52am   ↑ like (1)   ↓ dislike (0)   quote   flag        

It is my understanding that the battery is the most expensive part of the EV car. It is also the biggest bottleneck in terms of supply chain.

If Musk gets his battery giga-factory going as planned, I'd think Tesla will have a massive advantage compared to the other big auto-makers for the next several years.
188   zzyzzx   ignore (1)   2019 Jan 3, 11:55am   ↑ like (0)   ↓ dislike (0)   quote   flag        

socal2 says
If Musk gets his battery giga-factory going as planned, I'd think Tesla will have a massive advantage compared to the other big auto-makers for the next several years.


Tesla will end up selling the batteries to other automakers. Tesla cares are mostly a proof of concept that they might abandon at some point.
189   MrMagic   ignore (10)   2019 Jan 4, 9:03am   ↑ like (0)   ↓ dislike (0)   quote   flag        

Just two trading days into the new year, shares of Tesla were already down nearly 10 percent. According to Vertical Research Group’s Gordon Johnson, this is only the tip of the iceberg for what’s to come.

Johnson has an $88 year-end price target on the stock, which means he believes the automaker will lose 70 percent of its value in the coming year. For perspective, the average analyst price target for the stock is $334, according to FactSet.

“If you take the Q3 numbers and you annualize them, I think Q3 is going to be the high-water mark for Tesla. I don’t think they’re ever going to reach that level of earnings again,” he said Thursday on CNBC’s “Trading Nation.” “If you look at what the stock’s trading at, you’re talking about like you know near a 100 times multiple on those earnings, and the company is clearly not growing at that level.”

Because Tesla sells its cars directly to consumers rather than going through the traditional dealership approach, Johnson argues there could be some discrepancies in how its inventory is being reported. He also believes there will be massive cancellations after the government subsidy for electric vehicles was slashed in half.

https://www.cnbc.com/2019/01/03/wall-streets-biggest-tesla-bear-says-stock-will-tank-70-percent-in-2019.html
190   lostand confused   ignore (0)   2019 Jan 4, 9:49am   ↑ like (0)   ↓ dislike (0)   quote   flag        

TSLA is way too volatile. It was 300 then dropped to 200s then went up to 370 os so then again dropped. Market is crazy right now.
191   kt1652   ignore (1)   2019 Jan 4, 9:51am   ↑ like (1)   ↓ dislike (0)   quote   flag        

Tesla is our only dog in this fight. GM is like my addict friend who will mortgage the future for a quick fix. Chrysler – FIAT, enough said. Ford, they will ek out an existence with F150. The fall back plan is government bail out.
Tesla is being attacked on all fronts. The luxury cars will put up a fight. The KorChinPans are going to fight them for battery dominance. They have to invest huge $ in China, probably building the Y there. The last thing they need is to hemorrhage cash flow. They have no choice, it is the biggest EV market. Now they are going to fight the BYDs on their own turf. It's only hope is to innovate out of it.
What I am certain of, despite what each Chinese EV makers are saying publicly. “Tesla is in a different market segment than us, we can coexist.” BS. Whoever wins the low and mid end, game over.
192   E-man   ignore (0)   2019 Jan 4, 10:35am   ↑ like (1)   ↓ dislike (0)   quote   flag        

zzyzzx says


This is a good prank to pull on the kids when they're in the car. You move it to their seat and let it rip. ;-)
193   E-man   ignore (0)   2019 Jan 4, 10:37am   ↑ like (0)   ↓ dislike (0)   quote   flag        

kt1652 says
Tesla is our only dog in this fight. GM is like my addict friend who will mortgage the future for a quick fix. Chrysler – FIAT, enough said. Ford, they will ek out an existence with F150. The fall back plan is government bail out.
Tesla is being attacked on all fronts. The luxury cars will put up a fight. The KorChinPans are going to fight them for battery dominance. They have to invest huge $ in China, probably building the Y there. The last thing they need is to hemorrhage cash flow. They have no choice, it is the biggest EV market. Now they are going to fight the BYDs on their own turf. It's only hope is to innovate out of it.
What I am certain of, despite what each Chinese EV makers are saying publicly. “Tesla is in a different market segment than us, we can coexist.” BS. Whoever wins the low and mid end, game over.


It's ironic to see our own folks wanting our own American company to fail especially the loser short sellers on seeking alpha. They couldn't invent or create anything positive to contribute to the society. They want to benefit based on someone else's failure. What a bunch of losers.
194   SunnyvaleCA   ignore (0)   2019 Jan 4, 11:10am   ↑ like (0)   ↓ dislike (0)   quote   flag        

DASKAA says
SunnyvaleCA says
DASKAA says
Substitute Tesla for Amazon, electric cars for online retail and legacy car companies for brick-and-mortar retail giants

Do you realize that Benz, Daimler, Porsche, and many others had hybrid-electric cars well before Musk was even born?


Um, no, they didn't. First hybrid was Prius and Mask was already adult and millionaire. First German hybrid didn't appear till 2010 iirc. And hybrid-electric is not the same as full-electric. It's a cludge at best. Besides, if these guys are ready to eat Elon's lunch, why BMW's electric offers suck so much and the rest don't have anything at all (well Daimler did have a fully-electric offering based on .... drumroll... Tesla drivetrain).

Starting in 1900... here you go:
https://en.wikipedia.org/wiki/Lohner-Porsche
http://www.paicehybrid.com/tag/1906-mercedes-mixte/

And both cars were also available as electric only.
195   DASKAA   ignore (4)   2019 Jan 4, 11:25am   ↑ like (0)   ↓ dislike (0)   quote   flag        

SunnyvaleCA says
DASKAA says
SunnyvaleCA says
DASKAA says
Substitute Tesla for Amazon, electric cars for online retail and legacy car companies for brick-and-mortar retail giants

Do you realize that Benz, Daimler, Porsche, and many others had hybrid-electric cars well before Musk was even born?


Um, no, they didn't. First hybrid was Prius and Mask was already adult and millionaire. First German hybrid didn't appear till 2010 iirc. And hybrid-electric is not the same as full-electric. It's a cludge at best. Besides, if these guys are ready to eat Elon's lunch, why BMW's electric offers suck so much and the rest don't have anything at all (well Daimler did have a fully-electric offering based on .... drumroll... Tesla drivetrain).

Starting in 19...


Amusing, but irrelevant, factoid.
196   MrMagic   ignore (10)   2019 Jan 18, 8:11am   ↑ like (0)   ↓ dislike (0)   quote   flag        

Tesla cuts 7% of its workforce, and Elon Musk sees a ‘very difficult’ road ahead.

Tesla is cutting its full-time staff headcount by about 7 percent, as it ramps up production of its Model 3 sedans, CEO Elon Musk said Friday.

In an email to employees, Musk said the company faces a “very difficult” road ahead in its long-term goal to sell affordable renewable energy products, noting the company is younger than other players in the industry.
https://www.cnbc.com/2019/01/18/tesla-to-cut-its-workforce-by-around-7-percent.html
197   MrMagic   ignore (10)   2019 Jan 18, 8:14am   ↑ like (1)   ↓ dislike (0)   quote   flag        

Electric-car maker Tesla Inc. will cut approximately 7% of its full-time workforce and warned that Q4 profit won’t meet the performance of Q3, CEO Elon Musk said in an update Friday.

Musk said Tesla TSLA, -9.04% faces a tough challenge of “making our cars, batteries and solar products cost-competitive with fossil fuels,” and that the company’s products are “still too expensive for most people,” according to the update on the company’s blog that was emailed to all employees.

The job cuts follow a 9% staff reduction in June.
https://www.marketwatch.com/story/tesla-warns-on-q4-profit-cutting-jobs-to-pull-down-model-3-price-2019-01-18
198   MrMagic   ignore (10)   2019 Jan 18, 8:16am   ↑ like (1)   ↓ dislike (0)   quote   flag        

Elon Musk kills the Tesla referral program, suggests it hurt margins.

Tesla Inc. TSLA, -9.20% Chief Executive Elon Musk announced on Twitter late Wednesday the end of the Silicon Valley auto maker's referral program, which involved awards such as a $1,000 credit, Tesla merchandise and products, and months worth of free Tesla's "supercharging" over several iterations. The program officially ends Feb. 1, Musk said. In response to questions tweeted at him, Musk said there were no plans to create another referral program, and suggested it was hurting margins. The program added "too much cost to the cars, especially Model 3," Musk said.

https://www.marketwatch.com/story/elon-musk-kills-the-tesla-referral-program-suggests-it-hurt-margins-2019-01-17
199   MrMagic   ignore (10)   2019 Jan 18, 8:19am   ↑ like (1)   ↓ dislike (0)   quote   flag        

Musk announced the job cuts, the first since June, in a memo to employees. Musk is hoping to sell the Model 3 at $35,000. Late last year he debuted a "low-cost" Model 3 with fewer advanced features that debuted with a price tag of just $45,000). He added that the company had "no choice" but to reduce its work force after it increased by 30% last year. The company will retain "only the most critical" temporary workers as it seeks to find a way to lower its head count and ramp up production at the same time.

(Yes, that always helps companies, sell at a lower price, that always makes for better profits!! He'll just make it up in VOLUME!!!!!) (Plus, everyone knows you get better productivity from LESS staff).

They also follow a lowering of Tesla's Q4 profit outlook, according to the Street (this comes after the company earned a surprise profit in Q3, albeit a paper profit that was contingent on the company using "every trick in the book").

https://www.zerohedge.com/news/2019-01-18/tesla-lowers-q4-profit-guidance-unveils-plans-cut-7-work-force-stock-slides
200   MrMagic   ignore (10)   2019 Jan 18, 8:20am   ↑ like (1)   ↓ dislike (0)   quote   flag        

aahhhhhhh, but that accelleration!!!!!!!
201   zzyzzx   ignore (1)   2019 Jan 18, 9:05am   ↑ like (2)   ↓ dislike (0)   quote   flag        

$315.49/sh -31.82 (-9.16%)
202   mell   ignore (2)   2019 Jan 18, 9:25am   ↑ like (0)   ↓ dislike (0)   quote   flag        

Told ya so. Books were "legally" cooked as much as possible for the recent "surprise profit" quarter. Let's wait for next q numbers.
203   Rin   ignore (3)   2019 Jan 18, 10:29am   ↑ like (0)   ↓ dislike (0)   quote   flag        

zzyzzx says
Tesla will end up selling the batteries to other automakers. Tesla cares are mostly a proof of concept that they might abandon at some point.


Yes, and that's a sustainable business model as well.

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