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Tesla as an opportunity of investment

I belive that all people that are reading this post think that Tesla is a great Car Company, the most advanced, the most innoative and the most oriented at the future.
This is the reason for which I'm evaluating tesla as an opportunity of investment and i would like to discuss with you about this.

I think it's a good mid term investment but the short term is not obvious.

I was strongly recommending it around $28 a few months ago, and managed to convince one person who got in at 31.

At $38, who knows? Especially with the Dow at 14,000 and the quarter results in a few days.

If there is an upside surprise, for example if they raised the build target for 2013, the stock could rise into margin call territory for shorts and you'd see a short squeeze, who knows how high (but not very long lasting).

But, if there is a downside surprise, for example higher costs, we could go back to the low 30's. I think the floor is around 30, at worse $27.50 (excepting a catastrophic event).

If there is no surprise I think the stock oscillates around $40 for a while and becomes subject to the broader market. Where does the Dow go from here?

Nice analysis, i want to be a tesla shareholder but i want to buy the stocks at a right price. Watching the chart i noted that now is in a "red zone", is testing the resistance about 40$ and in the past that level was critical... but nobody can know how the title will perform, a good sentiment about tesla can bring the title up and render vain this reasoning.
Reading some news about tesla i noted that there are a lot of enthusiast, but at the same time a lot of doubts about the economic results and the financial assets, i'm interest and i will continue to follow the stock price waiting for the right moment to buy.

(sorry for any grammar errors, i'm italian)

I wish I had been on top of it when at IPO. As it is I came in @ 30 ish. and now am looking Long. But at least I have a skin in the game. Did really well on Ford stock "bought @ 4.00 per share when the economy was tanked and it performed nicely but I was late in selling it off and buying Tesla @ IPO Oh Well, in for a penny.. in for a pound

I think Q4 earnings in a few weeks should tell us more about where Tesla is headed. Q1 earnings however will be the real test as if Tesla can't show the possibility of profits down the road after a full quarter at full production there will be problems for the stock.
If I was a conservative investor I would wait until after Q1 earnings report sometime in mid April for a more clear indication. If profits look possible at that point I will be all in on Tesla...i have a few shares now that I bought around $29...but waiting for Q4 and Q1 reports before picking up any more.
I love this company but if they can't show a path to eventual profits after Q1 they will be in trouble.

Of course of all goes well the stock could be near $50 by April but that's okay...i see the stock well over $125 by 2015 if they continue to do well...Over $450 by 2020 if still successful...however I expect them to be bought out by one of the major auto companies fairly soon after they can show a clear path to profits.

Nobody knows wat will happen tomorrow, now put that thought beween your ears and keep it there for a very long time (which means: don't forget it!!!).

But I can tell you my opinion/vision. At the moment people underestimate the power of the technology that has been developed by Elon Musk and the people who have joined him and work with him. The value of Tesla Motors is only going to grow, and it will just keep on growing for a very long time. The Sky is the limit.

My advise to Elon Musk: "Never sell Tesla Motors"!!!
And I surely hope that there never will be a hostile takeover of Tesla Motors.

TADDYG:

I'm completely agree with you, i know that Tesla is near an important test, the 2013 Q1 results, but i can't wait for that moment, if there will be a profits the stocks will be grow and i will have lost the opportunity to buy at a lower price, what price level do you think is the most convenient ?

@wait for 1Q earnings. First off you will be waiting until Mid-May, not April unless Tesla changes their accounting schedule. Right now Tesla waits almost 2 months after quarter close to report. Secondly, there are way too many smart people tracking deliveries and reservations on this forum. If you pay attention to those posts, you can estimate direction of earnings for the company. Yes, those tracking posts can be inaccurate but they have been pretty close so far and will cotinue to be until Tesla changes to a nonsequential numbering system which they cant do for VINs but could for reservation numbers. Right now, the only question is whether or not the reservations will keep up with production capacity. We will know that in a month or two, not May.

If you think tesla is a LONG stock then start dollar cost averaging instead of trying to time the market. Just my 2 lira worth.

Dollar cost averaging works because it operates on the assumption that you are not better at timing and guessing than the market (i.e., other investors). It substitutes rigid repetitious buying schedules for fear and enthusiasm.

Sandman...totally right, don't know why I said mid April..it will be mid-May for Q1 reports.
Reservation and delivery VIN's certainly help to know how Tesla is doing on the production rate but we really need the financials to know if Tesla is cash flow positive, and if they are really on course to ever make a profit.
I know Elon expects a 25% gross margin and I believe him but the numbers will tell all and the most revealing ones will be Q1, although I will be looking hard at Q4 too.

TeslaLover: It just depends on your risk tolerance...if you want to take more of a gamble and get in at a lower price sure try to scoop up some shares now on the next dip...however if you are conservative and want more clarity on Tesla's ability to be sucessful Q1 is going to tell you a lot.
Sure you may have to buy at $50 or $55 in Mid-May but if you are planning to hold the stock for the long haul this is a small price to pay...as I said I see the stock well over $125 by mid 2015 and over $450 by 2020, all going well.

On the other hand if Q4 and Q1 are very disappointing in terms of Tesla's profitabilty outlook and they need to raise more capital to continue operations the stock could suffer a big hit. Tesla is currently priced for a successful Q4 and Q1 so any major problems will hit the stock hard...as a young car company using new technology it is impossible to know what their long-term reliability will be. A major recall could be crippling for Tesla.

There are no guarantees in this world in anything, especially the stock market...you have to look at the potential risks and rewards...I am at a stage where I can afford to take a certain amount of risk on Tesla but I'm certainly not betting the farm.

After Q1 I think I may get a bit more agressive if things look good. May have to pay a bit higher price but as I said the stock goes much much higher after that if things continue to go well.

Another thing to think about...the HUGE short position in Tesla.
If things go well or there is a rumour of a major auto buyout the stock could explode as shorts run to cover.

I use the Volkswagen short squeese a few years ago as an example. Back then only 15% of VW stock was sold short...Porsche announced it was considering a buyout of VW and the stock exploded 5 times its value in ONE day! About 35%-40% of Tesla stock is currently sold short...if any major positive news comes Tesla's way the upside could be epic, perhaps even the biggest short squeese in history.
Why? Because 40% of Tesla is insider ownered (Musk has over 25% himself), another 10% is Mercedes, another 10% Toyota, another 5% Panasonic, and I would bet another 10% are Tesla owners and people who are extremely confident in the company and the future of the EV. This will leave VERY few sellers for the shorts to cover and could drive the price to monumental levels.

Of course short squeezes don't last forever and eventually the stock goes back to its fair value, however if you are paying attention fortunes could be made here.

Just another thing to think about.

very helpful advices, i think that buy at differents times is a smart strategy, i want to but this title and hold it for a long time so i belive it is the best way on this type of operations. Personally, watching the Trading Book i see that a lot of investors want to buy at a lower price than the actual: the Bid/ask spread is about 12% ! (Source: ADVFN.com 03/02/2013)... i don't know what to expect this week, hope in a little flexion to buy, if not, is not a problem i will buy however..

How do you guys feel about the stock splitting?

The stock price of Tesla Motors is not very likely to come down. It's much more likely that it will only go up. By the way, teddyg is right.

you right Benz, this is not a speculative stock where every dollar make the difference, this title must be loved :) i'm going to buy this week...

I think that you will not regret it. Be patient, you will see profit coming your way eventually.

we will see profits only if Tesla make profits, and i think they can do it... this society has faced and overcome many obstacles, this is just one of those...

I agree with you on that. Good luck.

when the results of last year ?

Q4 2012 will be announced on February 11th 2013.

Danielcc:

The dow effect is being felt !!

Where i can read the balance of 2011 ??

You can find all the reports in http://ir.teslamotors.com/sec.cfm

That said, the balance for 2011 is of no relevance to Tesla today. The Model S represents a 20X scale up in production. Historical numbers have no predictive value, though if you are curious, knock yourself out.

The markets are indeed down today.

I know people say not to try to time the market, and that's true most of the time. Still, you want to at least avoid "top ticking" the stock and being the guy who paid more for it than anybody else, which is why I did not feel comfortable recommending it above $38 quite yet.

They key to successful investing is risk control and anticipation. If we wait till all the news is out, it will be all priced in. Let me look at the what I think I know:
1. Demand - With limited deployment, the demand with bookings in excess of 20,000. Reading the forums, company announcement extrapolation, etc. With marketing in Europe, Japan, etc bookings should be sustainable. Then Model X kicks in next year. Supercharger network expands and drives more demand. Demand may exceed 20,000/year if quality is maintained with no battery issues. Long term, they need Gen III with battery breakthroughs.
2. Supply - It looks like the company can produce 400 cars/week or 20,000/year. Obviously, running the factory for long hours/week can increase production with just incremental labor costs, components. Minimal capex.
3. Profitability - With even 20,000 cars/year, the company should benefit from economies of scale. Less labor/car as volume increases and skills go up with the learning curve. The presses, jigs, the whole manufacturing process gets tuned in so that there are less deviations from tolerance - less rework that costs a lot of money in labor. The outsourced component costs should come down with volume. That would include the gearbox, castings, etc. The electronics cost, including the inverter, power control, display tablet, etc should see big fall in costs with volume and time. The simple design of the car seems to be able to benefit from economies of scale. With so much negativity, the surprise will be on the upside at least for now.

I think the company will have good cash flow from operations, but will burn cash in capex that includes the supercharger network, further automation of assembly. Design of GenIII, tooling of Model X body + GenIII, and R&D will suck a lot of cash. This is not like Coke, or even Apple that outsources everything, generates huge free cash flow.

Basically, if the company fine tunes operations and brings costs down, they should beat expectations.

@ Bubba2000

Well said, and I agree.

now tesla's shares are about 39$, the historical maximum is 40$..
Do you think is going to break that level ? i don't know if buy now or wait....

The SuperCharger network is cheap. TM produces the chargers, which it already does at "economies of scale" (per Elon), and Solar City manages the rest. And TM is already close to the 30,000/annum rate Elon targeted; two shifts have a max rate of 800/wk, and 600 is enough to meet that goal.

Tesla Lover;
Dollar cost averaging. Do both. Buy now AND wait.

Oops! Up another $1+ today. Gettin' squeezy! ;p

I wonder how they are dealing with the land lease? costs for the physical "footprint" of the individual Superchargers? Case by case basis? In conjunction with one or more power providers / utility companies? Their own Solar City arm?

As far as the stock I'm all in right now and set to purchase more whenever trigger is met which I can adjust as needed/wanted. I'm in for the long haul and have switched the lions share of my portfolio to Tesla stock.

Here I go! for better or worse ..

if I mix it up right, the Teslas work 20 hours a day... outputting annually 25000-28000... we where nerver told, how many shifts bring what output.
I think, the actual calculation (with the actual state of the factory) is:

1 Shift 200/day
2 Shifts 400/day
20 hours- 2,5 Shifts ...a little more than 400.

I believe, that they nearly maxed out the "one-production-street".
That's just the message, I substracted from all the news and Interviews.

My investment plane is started, i plan to buy something about 10 share/month, increasing when (if) the price fall... first order 100 pieces...

living in italy i've got the change eur/usd on my side, so it' s less expensive...


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