Author Topic: Is Tesla a good investment?  (Read 9513 times)

nick663

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Re: Is Tesla a good investment?
« Reply #100 on: April 12, 2018, 08:01:44 PM »

What is your source of production at ~300 cars per week?  Based on a quick scan of dealer lots around me, there is no shortage of Bolts and the sales nosedive that occurred in 2018 (compared to late 2017) is likely due to the end of a promotion offering employee pricing.

https://insideevs.com/monthly-plug-in-sales-scorecard/

Note that when I posted, the March numbers were not available.

Add January + February, divide by 8.5 = 306 per week.
Those are sales numbers, not production numbers.  I would bet that days of inventory is increasing on the Bolt as I have no problem finding one on a lot right now and demand was likely pulled ahead due to promotions in late 2017.


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And, to repeat an earlier post: Bolt production was never designed for the volumes of the Model 3 and the investment into manufacturing was significantly less.  You're comparing apples to oranges and disparaging GM despite the fact that it looks like their factory has run at 100% of designed capacity while Tesla is still at a fraction of theirs.

GM delivers more cars in a month than Tesla does in a year while turning a profit.  Talking negatively about their manufacturing capabilities while praising Tesla just makes you look silly.

Did I disparage GM in that post? Really? I suggest you re-read.

"GM is supposed to be the mass market volume production expert. I wish they would show some signs of actually doing so though."

This was in the context of other manufacturers not taking EV production seriously.

Your posting seems to totally support what I said. GM delivers more cars in a month than Tesla does in a year, yet didn't design the Bolt line for larger volumes nor work to ramp.

Hmm. Seems to totally agree with my premise that GM is not taking EVs seriously. They COULD produce more EVs, yet continue to fail to do so.

BTW, that Bolt production is shared with the Sonic. GM could readily shift production mix to be heavier on Bolt output.

March production was up slightly, bringing 1Q to an average rate of 336 Bolts per week. My original ~300 actually still stands (one significant digit)
The problem with your quote from a previous post is it seems to lay the blame on them not being experts in mass production.  You could make an argument that their initial targets were off but that is a failure of forecasting, not manufacturing.  From all outside appearances the manufacturing group did exactly what was communicated and the line is performing as designed.

I also think it would be pretty weird to chastise GM for missing slightly on a sales forecast when Tesla has missed literally every target they have put out in the last 5 years. :)

shinn497

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Re: Is Tesla a good investment?
« Reply #101 on: April 13, 2018, 06:31:54 PM »
I personally say buy the stock if you believe in the company, but not as an investment decision. Then again I I wouldn't never recommend any single single stock sine i have no idea. I want to buy a small amount of TSLA though. Like maybe 1% of my investable assets.

sherr

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Re: Is Tesla a good investment?
« Reply #102 on: April 13, 2018, 09:55:04 PM »
I personally say buy the stock if you believe in the company, but not as an investment decision. Then again I I wouldn't never recommend any single single stock sine i have no idea. I want to buy a small amount of TSLA though. Like maybe 1% of my investable assets.

This is the some of the worst advice I've ever heard in Investor Alley.

Do you know how much it helps Tesla if you buy there stock? None at all. They got all their money when they sold the shares to the public in the IPO. All you're doing now is trading slices of ownership for money with some other random Joe. It literally doesn't help them at all, so there's no reason for you to risk your own personal wealth unless you think it's a good investment. Aka, you think you're getting more than your money's worth, and you are highly confident that the price will rise in the future because you see something the average investor doesn't. If you actually don't know what you're talking about, which it certainly seems is true, then just follow the expert advice and put it in an index fund.

Can we observe how nonsensical your advice is? "Do it! But don't do it, IDK. But do it though! Just a little bit." Seriously guy, if you don't have anything to say then don't say anything and don't tell other people how to waste their money. Let's be clear, I don't have a problem with you in particular or with Tesla. I have a problem with people who have no idea what they're talking about telling other people what to do.

I hope Tesla succeeds. To some degree they already have; they've kicked the other auto manufacturers in the pants and made them take the idea of electric cars seriously. I also believe electric cars are the future, be it 5 years from now or 50 years from now. But I'm also not spending a single dollar on any individual stock, especially not TSLA at this price.

shinn497

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Re: Is Tesla a good investment?
« Reply #103 on: April 15, 2018, 10:38:14 PM »
Yep! If the stock price rises, and there is high demand for it, the company can later issue more shares if it needs more capital. Having a high price, gives a cushion so supply can increase without a loss of value for its primary investors. This is why we invest in companies that we think will do better, and why stores of value (like gold), are only useful as hedges against inflation or a short term economic downturn.

I see it this way. It is super hard to gain knowledge or insight about a company over the general public, or against savvy firms like Bridgewater. In addition, because of lotto bias, you need to be really careful about peoples results or claims. Taking positions against individual companies is just really risky and we should be honest about that.

So I personally say invest in TSLA if you think they are cool, believe in what they are doing, and want a piece of the company. Beyond the whole stock buyback thing, there are other ways a high stock price benefits them. But I don't have enough insight to say they will make you money. So like please don't leverage(don't do this ever) or put your life savings with them. I sort of hope that was implied. I mean supporting them is nice, but like I hope no one is naive enoughto think the small amount they personally have is enough to make anything more than a token difference.  I personally have a small fraction of a share I got for free.

Then again, I'm a noob. I am not going to suggest anything other than a broad index.

With that said,  if you think investing is all about objective facts and not about personal biases and emotions. Welp I have some bad news for you there.

And jeese no need to be so mean.
« Last Edit: April 15, 2018, 10:40:06 PM by shinn497 »

sherr

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Re: Is Tesla a good investment?
« Reply #104 on: April 16, 2018, 07:46:02 AM »
And jeese no need to be so mean.

Sorry, I agree I owe you an apology there.

shinn497

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Re: Is Tesla a good investment?
« Reply #105 on: April 16, 2018, 08:37:25 AM »
Saul Good Man

alanB

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Re: Is Tesla a good investment?
« Reply #106 on: April 16, 2018, 10:11:48 AM »
If no one ever bought another share of TSLA the price would crash, another automaker or private equity would be happy to scoop it up in a fire sale.  Also I doubt they could continue to float outrageous new bond offerings if the price collapsed.

This is the some of the worst advice I've ever heard in Investor Alley.

Did you read any of the threads about cryptocurrency? ;P

genesismachine

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Re: Is Tesla a good investment?
« Reply #107 on: April 16, 2018, 01:54:33 PM »
This is kind of off topic, but having a high share price is one factor in the company's credit rating. Having a better credit rating helps Tesla to get a better interest rate on debt. Some of the debt is short term debt used for inventory purposes. So in theory, having a higher stock price indirectly helps them pay a little less in interest than they otherwise would.

So even if they never issue another share, having a higher stock price can make the company more profitable/have more resources to reinvest in the company mission.

CorpRaider

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Re: Is Tesla a good investment?
« Reply #108 on: May 03, 2018, 07:50:41 AM »
Tesla is more than a mere investment.  Brother Elon may soon have need of our cash!  Thus, I think it may be time to start the "Tesla tithe." http://thecorpraider.com/2018/05/03/the-telsa-tithe/



Stachless

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Re: Is Tesla a good investment?
« Reply #109 on: May 03, 2018, 10:12:32 PM »
This is kind of off topic, but having a high share price is one factor in the company's credit rating. Having a better credit rating helps Tesla to get a better interest rate on debt. Some of the debt is short term debt used for inventory purposes. So in theory, having a higher stock price indirectly helps them pay a little less in interest than they otherwise would.

So even if they never issue another share, having a higher stock price can make the company more profitable/have more resources to reinvest in the company mission.

As an Evil Banker I have to disagree with this.  Stocks split all the time and is seen as a GOOD thing for investors, though it cuts the price in half, a third, whatever ratio they split at.  Share price is also a function of # of shares issued, so its kinda like saying a pizza sliced in 10 pieces is half as tasty as a pizza sliced in 5 pieces.  Its really not a factor.

However, the converse is not true, as an OTC / penny stock is usually a good sign of a bad credit.  Not coincidentally because they aren't making any money!

CorpRaider

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Re: Is Tesla a good investment?
« Reply #110 on: May 04, 2018, 09:17:41 AM »
I think he means large equity valuation rather than "high share price."  A "thick equity cushion" as Reed Hastings (who also can burn cash on a world class scale), put it.  Of course that thick cushion can evaporate really quickly.
« Last Edit: May 04, 2018, 09:20:33 AM by CorpRaider »

genesismachine

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Re: Is Tesla a good investment?
« Reply #111 on: May 07, 2018, 11:27:18 AM »
This is kind of off topic, but having a high share price is one factor in the company's credit rating. Having a better credit rating helps Tesla to get a better interest rate on debt. Some of the debt is short term debt used for inventory purposes. So in theory, having a higher stock price indirectly helps them pay a little less in interest than they otherwise would.

So even if they never issue another share, having a higher stock price can make the company more profitable/have more resources to reinvest in the company mission.

As an Evil Banker I have to disagree with this.  Stocks split all the time and is seen as a GOOD thing for investors, though it cuts the price in half, a third, whatever ratio they split at.  Share price is also a function of # of shares issued, so its kinda like saying a pizza sliced in 10 pieces is half as tasty as a pizza sliced in 5 pieces.  Its really not a factor.

However, the converse is not true, as an OTC / penny stock is usually a good sign of a bad credit.  Not coincidentally because they aren't making any money!

I'm talking about the pizza getting bigger, not how you slice it. I agree about the share price not being the end-all if there are splits.

ColoradoTribe

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Re: Is Tesla a good investment?
« Reply #112 on: August 02, 2018, 11:47:57 PM »
@ColoradoTribe:  I agree EVs will do great things. However, Tesla has to still be around to benefit from that.

They have built amazing cars. They have big dreams for the future. I personally want them to be successful, I want to be able to buy a used Model 3 in the future. I want to be able to have solar with a battery back up. The problem is that investors have been pumping up the stock based on the dreams of what Tesla 'could be,' and not what it is today. Expectations have been set unrealistically high and Tesla has borrowed money based on those expectations.


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Five years from now it will not matter whether it took them an extra six months to get production up to 5k/week.

Actually, in reality, it might matter a lot. It could be the difference between Tesla producing 1 million cars/year in 5 years VS bankruptcy within 12 months. Tesla will need more funding soon. Bond investors don't live in the clouds, they don't trade based on dreams of what could be in 5-10 years. Bond investors like results, and they like those results printed on boring balance sheets and cash flow statements. If Tesla doesn't increase Model 3 production, FAST, like really FAST, then the next time they issue bonds they might not find willing investors. Tesla isn't Apple or Google, or even Ford. Those companies have cash on hand. They can handle shocks. They can recover from mistakes. Tesla is running on borrowed money and broken promises. Many great companies have fallen prey to big dreams... and too much leverage.

People have been predicting Tesla's imminent bankruptcy and demise for as long as I've been following the company/stock. I bought more common shares today and will sleep well tonight. Those aligned against this company and its disruption (not you personally) know that once the model 3 ramp is complete that Tesla becomes profitable and this narrative goes away, so they're milking it one last time. I see indication that the model 3 ramp has picked up to 1500 - 2000/week the past week or two. They'll likely hit 2500/week in the first of Q2, in plenty of time to satisfy bond investors. There was a chance of Tesla failing in the early going, the chances of such a failure now are very low IMO. We'll know for sure in a few years.


Sure people have predicted bankruptcy before but past performance cannot be extrapolated forward.  This is clearly make-or-break time for Tesla.  In the past investors have bailed them out, by giving them more cash.  However, given that this is what the company has been shooting for, the high-volume, mass market EV, if they can be successful in ramping up production (and have enough demand) then they should be okay.  If not, they may go bankrupt in the next 1-12 months. 


However, even if they are successful at their ramp up, the main remaining potential worry that I see is that they will likely not be a top-5 automaker and thus cannot justify their market cap.  Once they stop being a company valued on future potential and our desire to see a sustainable transportation future but on actual sales and revenue and profits and reliability and all the other boring stuff that most blue chip companies are judged on, then I see it as unlikely that their sales will be similar to the big car makers.  Remember all the other guys are bringing out EVs and PHEVs too and that car buyers are notoriously picky about their cars in terms of brand, design, model, style, etc. . .  Teslas, despite their cool factor, are not for everyone. Just like Priuses or F-150s or Camrys or Accords aren't.

I think you way over simplify how easy it will be for the ICE manufacturers to turn to EVs, while maintaining their ICE production. Its hard to serve tow master. I would also point out that Tesla's biggest advantage is not their cars per se, its there ability to produce enough batteries for mass produce EVs. Unless I missed it, Ford, and GM do not have a gigafactory to mass produce the Lithium Ion batteries.

As far as valuation, the stock price will almost always stay ahead of the valuation for disruptive growth companies. THat's okay with a buy and hold strategy. Tesla is no longer a "car company", it's an energy and transportation company. As I mentioned above, Tesla is tackling grid scale battery backup/stabiliztion, residential battery storage, commercial trucking, solar roofing shingles, manufacturing automation, self-driving cars, and more. Will Tesla hit a home run with all these, no, but chances are they'll succeed on multiple fronts.

I suggest, instead of going back and forth and likely not change either of our opinions, let's make some predictions and see what happens. Here are my predictions for 2018. Tesla will finish the year:

With at least one, possibly two profitable quarters
Sell over 250,000 vehicles (S, X, M3), which would be 150% YOY growth
Stock price over $400


PS - I also predict the M3 will be named Popular Mechanics 2018 Car of the Year :)
https://www.popularmechanics.com/cars/g19605464/best-cars-2018/


Sure, sounds like fun. 
I predict Tesla won't sell 100,000 model 3's this year (and I think that will be very impressive and a win for them if they get close to 100k ).  Remember that they were shooting for 500k this year. 
I think TSLA won't end the year over $300, and there's a decent chance it'll go below $200 this year.


Remember there were only 200k EVs and PHEVs sold in the US in 2017.  It's not as if there was a supply issue for these vehicles.  It takes time for consumers to become aware of and wrap their minds around the changes that driving a plug-in car entails.  It's not a switch that happens overnight.


I'm feeling good about my TSLA holdings and my 2018 predictions bolded above. All the trend lines are favorable exiting Q2.

Tesla produced over 41,000 Model 3 sedans in the first half of the year.  They are currently producing roughly 4,500 Model 3s per week at a sustainable rate. Their stated goal is 6,000/week by end of August. Even if they only average 5,000/week for the remainder of the year, they would still produce well over 150,000 Model 3 in 2018. Combined with roughly 100,000 Model S and X and Tesla appears on track to sell over a quarter million EVs in 2018 and a half million vehicles in 2019.

A slow in capex, favorable economies of scale, and cost saving measures, should allow Tesla to post its 2nd ever profitable quarter in Q3.

Stock price jumped to $345 (ATH is around $360) following Q2 ER. Profitable Q3 will catapult SP well over $400 IMO.

Will update again at the end of Q3.
« Last Edit: August 03, 2018, 12:02:48 AM by ColoradoTribe »

DavidAnnArbor

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Re: Is Tesla a good investment?
« Reply #113 on: August 03, 2018, 07:55:38 AM »
I hope Tesla changes the planet.

Mr Mark

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Re: Is Tesla a good investment?
« Reply #114 on: August 04, 2018, 10:17:52 PM »
I hope Tesla changes the planet.

Me too. Solar is the future. But my next car will be a second hand Leaf...

lemonlyman

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Re: Is Tesla a good investment?
« Reply #115 on: August 07, 2018, 03:02:41 PM »
Well, today was crazy: Elon with wild tweets that halted trading. Telsa going private with shareholders given the option of selling at $420/share or keeping equity in private company. Trading resumes and shares ended 11% up on the day.

nick663

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Re: Is Tesla a good investment?
« Reply #116 on: August 07, 2018, 03:14:36 PM »
Well, today was crazy: Elon with wild tweets that halted trading. Telsa going private with shareholders given the option of selling at $420/share or keeping equity in private company. Trading resumes and shares ended 11% up on the day.
"Considering" going private.  Weasel words are important.

$420/share would give them a market cap of 71 billion.  Would love to know who the sucker is that is willing to pay that.

Scortius

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Re: Is Tesla a good investment?
« Reply #117 on: August 07, 2018, 03:46:45 PM »
Basically if you buy any of those companies, you're playing the capital appreciation game and there's only one way to make money doing that; the stock has to move in the correct direction. In my opinion, that's too hard a game to win long term.

There's a reason stock prices appreciate when healthy and expanding companies reinvest in themselves rather than sit on profits. If you don't understand this or don't feel like these gains are grounded, I would suggest you look into a much more conservative approach to retirement, such as limiting yourself to dividend funds and bonds and CDs and drawing on 2% of your nest egg rather than the standard 4%.

CCCA

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Re: Is Tesla a good investment?
« Reply #118 on: August 07, 2018, 04:05:38 PM »
Well, today was crazy: Elon with wild tweets that halted trading. Telsa going private with shareholders given the option of selling at $420/share or keeping equity in private company. Trading resumes and shares ended 11% up on the day.
"Considering" going private.  Weasel words are important.

$420/share would give them a market cap of 71 billion.  Would love to know who the sucker is that is willing to pay that.


whoa, that is crazy.  I was definitely wrong about the near-term movement of the stock (luckily I'm not short or anything). At some point the company has to justify this crazy market cap.  For now, I guess there are enough people excited about the potential of the company to ignore what a 71 billion market cap implies.

TomTX

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Re: Is Tesla a good investment?
« Reply #119 on: August 07, 2018, 05:26:44 PM »
Well, today was crazy: Elon with wild tweets that halted trading. Telsa going private with shareholders given the option of selling at $420/share or keeping equity in private company. Trading resumes and shares ended 11% up on the day.
"Considering" going private.  Weasel words are important.

$420/share would give them a market cap of 71 billion.  Would love to know who the sucker is that is willing to pay that.

Apparently the Saudis. Specifically the Saudia Arabia Sovereign Wealth Fund.

https://en.wikipedia.org/wiki/Public_Investment_Fund_of_Saudi_Arabia

Which makes some sense as a hedging scheme for them. If Tesla (and other EV producers) continue explosive growth, their main current value (oil) largely goes away.

SnackDog

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Re: Is Tesla a good investment?
« Reply #120 on: August 08, 2018, 10:55:06 AM »
Well, today was crazy: Elon with wild tweets that halted trading. Telsa going private with shareholders given the option of selling at $420/share or keeping equity in private company. Trading resumes and shares ended 11% up on the day.

Tesla stock price still severely trails the overall market for the last 12 months.