I am a huge $TSLA fan so I tend to look at things about Tesla and Elon Musk with a positive bend.
As an owner of Model 3 who loves his car, I know first hand that Tesla makes amazing cars that deliver an amazing driving experience at great value. These cars are not cheap, but the performance and the fun that they deliver are worth a lot more money than what you paid for.
However, with my money – same money that will fund my retirement, I need to be careful and not be swayed by emotions – i need to make money and to make money in stock market, you need to know fundamentals AND stock set-up. I think Tesla stock checks off both boxes – I discussed them below
Fundamentals- VERY strong
Anyways, today (October 1st or also known as the first day after 3rd quarter) was deliver day for Tesla. It is all over the news – record delivery with crazy growth that beat all expectations – just like their cars!
It was so strong that even traditional media are saying it is “eye-popping” – the momentum continues on with new factories opening up and model S/X production ramping up. New car sales as a market is going down (traditional ICEs are losing volume- blaming chip shortage), but Tesla is growing – exponentially increasing market share.
What is more exciting is that each car out there represents enormous add-on sales opportunity through subscription – like “premium connectivity”, full-self driving subscriptions, Tesla insurance, and Tesla accessories. Tesla also makes money through selling accessories and providing repair service through its owned Tesla Service Centers.
People talk a lot about ARR growth for enterprise SaaS companies – Tesla will do that on a massively growing userbase.
STOCK SET-Up
This is also positive – As an investor, you also need to check incentives of key stakeholder – Elon Musk – and you will see that he is incentivized or rather PUT HIMSELF in a position where he MUST KEEP TESLA STOCK PRICE FROM GOING UP. Let’s see why –
Elon Musk has relatively very low cash income va. his net worth.
That means that he has been using his savings and borrowing money to fund his everyday life, investing in SpaceX or any other businesses that are very promising but needs continuous funding.
He is raising money from outside investors- but he needs to keep participating to retain control – so that he continues to push through his vision without investor revolt.
Do you know what serves as his collateral for all of those capital-heavy activities -Tesla stock.
Tesla equity stake is not just a way for him to retain control of Tesla, but it serves as the ultimate piggy bank for him upon which every important thing he owns could unravel.
That is because Tesla is the only publicly traded entity – which allows easy liquidation and thus has high collateral value to the banks.
Therefore, Elon Musk MUST KEEP THE STOCK PRICE OF TESLA HIGH or PUSH IT HIGHER.
Obviously he is not manipulating stock price – but he is pushing his team hard to make the business more valuable EVERY DAY VERY HARD.
So – it is a positive reinforcement of fundamentals and incentives of key stakeholders.
I am super excited about Tesla’s future and my investment in Tesla- are you?
If you agree/disagree, please share your thoughts in comment section. Thank you!
