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Good news for stockholders

Tesla stocks have soared today and nothing but praise by journalists.

A very interesting article:

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http://www.bloomberg.com/news/2013-07-11/tesla-model-s-sedan-output-spee...

"As a wider range of battery-powered vehicles are added to Tesla’s lineup, the Fremont plant will one day return to its pre-Tesla production level of 500,000 vehicles a year, Musk said, without elaborating. That was the factory’s capacity in its GM-Toyota period.

“We going to have every kind of car you could possibly imagine,” he said. “If it moves, we’ll make it.” "

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Looks like Tesla is the real deal. We have another Steve Jobs on our hands :)

Journalists on Twitter are fighting to get an interview with Elon. Once he gets mentioned by major TV stations and newspapers, Tesla will become a household name.

Let's cross our fingers!

That's very encouraging article. I was wondering how long Elon would stay as CEO at Tesla ? My guess, early retirement to Mars for EM is 2033 when he turns 62. That gives shareholders 20 more years with Elon at the helm if EM chooses to stay that long.

By 2033, Tesla car production could be at 5 million cars a year. That would multiply all the figures in your article link by a factor of ten. This gives a possible share price of $ 5,000 a share by extrapolating from the article's metrics. A secondary stock offering at that price would yield 500 billion, enough to build more car plants, buy Panasonic, etc.

There is precedence for such returns. For exa, Berkshire Hathaway stock was bought up by Warren Buffet in the $30/share or so in 1964, and now sells for over $180,000 a share today, see link.

http://www.fool.com/investing/general/2013/05/02/25-surprising-facts-abo...

I believe Tesla gets high valuation not only for accelerating growth of revenue; but, also ADiiii or "Accelerating Disruption of or through Industries, Ideas, Institutions & Inventions".

Just look what Tesla has already disrupted or invented:

Battery packs. Battery Chemistry. Battery form
Battery supercharging. Battery swapping. EV motor performance
No dealers. No salesmen. Guaranteed resale value lease
Low maintenance. No profit maintenance. Software wireless updatable
Computer Screen Interface, Solar City tir-ins & partnering. SCTY Storage Pack Sales
Drive Train Sales to Mercedes/Toyota. Etc

Therefore Tesla is highly valued by shareholders to give it the funds to continue its proven ability to re-invent & disrupt. For example, what if Tesla leased their batteries & for the price of gas or less, you always have a battery forever without the upfront costs ? What if you could earn money back from the utillity by using your car battery to buffer electricity back to the grid at home or work ?

I believe further Tesla disruption will occur when Tesla builds their second car plant from the ground up, designed by Elon & team to make EVs.

As long as Tesla keeps innovating & disrupting, I expect Tesla to always have a high valuation & stock multiple.

Thanks for the article link, it was very good.

I used some metrics from this link, from Curt Rens.

http://www.streetinsider.com/Analyst+Comments/How+Tesla+%28TSLA%29+Can+E...

I got my post mixed up with another link when Tesla's website shut down for maintenance before I could post. Sorry for any confusion on where I was getting my metrics from for Tesla's 2033 stock price. It's based on a speculation that Tesla could produce ten times the cars quoted in the link and how that would affect their stock price.

Personally, I think the figure could be even higher, say $15,000 to $20,000 a share for Tesla in 2033 if they concurrently build whole new revenue lines related to their car business, eg selling drive trains, selling car dash apps, selling grid storage and buffering battery packs for homes etc.

I believe I also slightly overstated Berkshire Hathaway's current price in my previous comment, It's more like $175,000. a share, not $180,000. a share. See stock history for Berkshire,

https://www.google.com/finance?q=NYSE%3ABRK.A&rm=0&ei=RyjgUdCaJonUlgOgbg

Interesting note Warren Buffet states he could have made 200 billion dollars more not buying Berkshire, since all the original companies are gone. But Warren and the stock seem to have recovered nicely.

Was it Buffet who said, "I became very wealthy by buying too late and selling too soon"??

The analyst is expecting 10% margins???????????? He is obviously out of touch with Tesla's goals. 25% target for the S and their internal goal is 30% as Elon gets stock options if he hits 30%. The Gen III car will obviously be lower than 25% but it will certainly be far higher than 10%.

Short squeeze continues. Only people buying here are fools and people who shorted the stock and must sooner or later cover (another form of fools). Even my most optimistic projections can't justify a valuation anywhere near the current. Another hint: insiders were routinely selling shares at around $30.

TR, and Elon bought share for $100 million at $92

The way TSLA has been trading so far this week reminds me of when Forrest Gump stops running his maga-marathon, turns around and starts walking back home, maybe wondering where he was going. Meanwhile, his followers ask what they are supposed to do, now.

Rurar,
I can think of many reasons why Elon bought TSLA shares at $92, but I'll just list a few:
-to infuse confidence in the IPO;
-to retain control, minimize the dilution of his position after the IPO;
-he probably couldn't resist the opportunity to help squeeze the shorts and throw the stock into the stratosphere so it might attract lots of attention = free publicity. The average person doesn't understand the difference between a short squeeze and pure optimism, so people see TSLA must be doing something right and it gives them confidence in going ahead and buying a model S if they were hesitating;
-his risk will always be less then your risk because remember he's in charge so he can do what sounds right to him even if it doesn't sound right to you;
-at the risk of sounding naive, I believe that Elon sees more than a profit opportunity in Tesla Motors.

I have a feeling Goldman Sacks created a lower entry point to get in in time.
They are investors and what they are doing is conflict of interest at best and shady at worst. Of course all the shorts who got burned are eager to buy the stock at a lower price.

I look at it as a litmus test that every new idea has to go through in the beginning. Idealists versus cold calculating greedy financiers.

Other reason could be that possible bad results have leaked for the 2nd quarter. Who knows?

Nothing surprises me as far as the stock market is concerned.

@EvaP - If you distrust Goldman's true motive for issuing a lower price target than the current market then you should take the very action that you suspect Goldman of doing - buy the stock. Benefit from their perceived shady conduct.

“If it moves, we’ll make it.”

We must harass Elon about this at every opportunity. Go-karts? RC cars? Trains? Skate boards? Bikes? Shoes? Lego Technic? Motorcycle? Bicycle? Monster truck? Lawn Mower? Wagon? Tricycle? Office chair?

Gimme a Tesla everything!

Joke. Bloomberg reporter too dim to know it. RU?

She missed a few beats, but very good in general.

Elon does not project 25% margin on GenIII, but is targeting up to 30% on MS/X and variants (over the next ~two years) as part of his options "bet".

Tesla continues to invest in automation of the factory. I noticed new robots in the final assembly, including the ones that install seats. I would think Tesla will modify design over time to make manufacturing and assembly robot friendly. Supply chain is getting optimized. Even battery pack manufacturing will get optimized. It is possible to cut the cost of the Model S+X - excluding batteries - by 50%. Reduce weight, add features. Achieve 25% gross margins and pass the remaining savings to the consumer to drive demand. In this case, Tesla could sell 250,000-500,000 Model S+X/year.

Price of the Model S+X needs with the regular 85KW-hr battery needs to be in the $55-65k range including the basic features like Tech Package, etc. With the nationwide supercharger, the autos will sell to the mass market upper middle class that buys E350, BMW 5, etc. Extra for the 85P, AWD, or even the 500 mile battery. This should be enough to disrupt the ICE market and drive the market xap to $100+B.

GenIII is too iffy. Without disruptive battery tech, it may be too lame. Don't need another golf cart. Margins may be too low. It is just like any tech product. When it hits the mass cheap market with skinny margins, the stock has tanked. I want to be long gone from the stock before that happens to Tesla.

Bubba;
The GenIII is to be a 200mi.+ car, hardly a golf cart. And getting to GenIII is the whole point of GenII. Apparently you don't get it.

For GenIII to be viable at the price points and acceptable range and performance levels, Tesla will need disruptive battery tech as well as economies of scale in manufacturing that will be partially based on Model S+X. Without disruptive battery tech a small car will not have enough battery energy and a real life 200 mile range will not be possible. 85S/P barely do 225 miles in real world situation.

GenIII needs batteries with double the energy density and cost/Kw-hr at half the current price. It will then enable smaller autos with acceptable range and cost. it will happen, but it will take time. Current battery tech will result in another Leaf kind of performance. Which is a souped up golf cart.

I have been long Tesla, and got an 85P due next month that I will trade for a X/Sig. I like the product and future versions will be improved. I expect the stock to do well if do not make significant mistakes, and they have not done any so far. As an investor, I do need an exit strategy. Usually before the product or class of products become commodities.

No disruptive tech needed. 200 mi on slightly lower weight and known advances in the pipeline will suffice. The key is Elon's 10x volume => half the cost formula.

@JZ13 - as far as I know Goldman Sachs raised their price target from $61 to $84. The press just portrait it as a lowering...

@kleist - agreed. That's why I phrased it the way I did.

Bubba: there's an article about what it would take to make Tesla's GenIII, and it can be done right now, no disruptive tech needed. If something comes along it'll only make GenIII that much better.

Looking to buy shares for the long run (at least 24 months). Is the current stock price of $135/each too high. Should I wait for it to drop or buy now?

Just my personal take. I bought shares at three occasions and never waited for it to drop before putting money in. The drop (I should have waited for?) never came and in the end I'm glad I just bought without giving any thoughts about timing :) I'm also in it for the long run.

Dollar-cost averaging is a good way to unhook from the rumor mill. Invest a set $$ amount every X days/weeks etc.

I tried to "wait for a drop" and ended up having to pay an extra $20 per share. Im glad I finally just bought shares because the stock hasn't gone down (past my buy in price) since I did.

Those who time the market pay the profits of those who don't.

Elon, I am in love with you:)

http://tinyurl.com/lgk598p

Up $19 after hours... so far. Wow.

Yeah, down $7 during the day, then up $19 when the Q2 results were in! Can you smell the stink of burning shorts?


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