My distaste of TSLA was built on a few different arguments. The main ones were basically: (1) overpriced valuation, (2) no sales data and (3) issues with how they were managing their leases.
(1) is still quite valid and I maintain my bearish posture on TSLA because of it.
Issues (2) and (3) however are getting the data and attention needed to back them up, if indirectly.
The leases were pushed off into a separate segment of the filing in the latest quarterly settlement. Whether this was of Musk’s own free will, pressure from outside sources, or some combination of the two is rather irrelevant – this needed to happen and it has. I’m still watching it closely, as an active stake against the stock, as it lost $0.15 for every share. But this early on could be prudent early write downs to get fair books as much as anything else.
And as for the sales data; we still don’t have any of that. This is an obnoxious inconvenience, and should be pretty straightforward.
However, CNBC commissioned Edmunds.com to to analyze registrations and online search data to get a feel for who is buying Tesla’s cars. 77% of the buyers, according to this estimate, have salaries over $100,000. 17% more have salaries over $50,000. If these estimates are accurate, then there is no concern about Tesla’s sales or leases, clearly. However, sales data really needs to start getting reported better, directly from corporate. If the company is a $17 Billion market cap, it needs to hold itself to it.
So what does this change? Not a whole lot, to be honest. I’ve never encouraged short selling TSLA – it’s too risky. My position is tiny, built of options, with a chance to add 5-10% to my account value if sometime over the next 2 years, the unexpected should occur. The omitted sales numbers and leases getting integrated with earnings (even though they’re long term payouts) were simply red flags. Now that they’re getting addressed, this play morphs into a foremost bet off the valuation and probability. The growth curve the company requires, if subject to any notable delays or missed expectations, will yield fruit to me.
However, these signs are good for Musk and the hardworking men and women at Tesla, who are being vindicated for their efforts.
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It would not have surprised me if 90% of buyers had salaries over $100k.
Tesla has the Tucker story. The we can do it bullshit. Only if the street says so. Stocks come down hard in anyway, you will get paid. A bunch of rich peeps flipping assets to each other is not a market that lasts. Must have the coming up youngster peeps. Clearly that element is lacking.
Its like too bad that they won’t be using the money and proprietary knowledge they gained on their first 2 cars to construct a 3rd generation vehicle that me as a 1st year college grad could afford.Than they would own the entire market and entire income bracket.
They will (if they survive) but it’s 3 years out, maybe 4.
The Tesla ‘lease’ risk is if blue book values for used S 3 years out is weak. If it’s lower than Mercedes, BMW or Lexus those owners will be turning their cars in for cash.
This is for people with money. Or young people with somewhat less money, but no obligations. After a $ 4 K mortgage, what is left?
Argue all you want. Even Musk negative comments about rich valuations could drag this down this week!
http://4nursebee.blogspot.com/2013/08/great-video.html