Buying a Tesla with Tesla stock earnings!

[Gold Run Ranch]

Anybody else doing this?

I have a Model 3.

In June I invested heavily in Tesla stock options (option to buy Tesla stock in Jan 2021 and 2022 for $250).

Now I have earned enough to pay for the Model 3 that I have. I am well on my way to earning enough for the eight Cybertrucks I have on order and the Semi I have on order (actually the orders are more like reservations). It looks like the timing will work out.

Anybody else out there investing in Tesla so that the profits pay for buying the Tesla?

If you are wondering, I am still buying Tesla stock options (Tesla currently at $650) and going to several thousand in a few years.

According to Elon Tesla will deliver at least 500,000 cars in 2020 (production capacity is currently 640,000 per the table in the earnings report so 500,000 is conservative). Elon says 50% growth in sales per year is easily achieved (last five years growth in sales averaged 64% each year with the last year seeing 82% growth - so 50% is conservative). If you compound the growth in sales, Tesla will be selling 5 million cars and trucks in 2026! At $50,000 each on average, this adds to $250 BILLION in sales and at 20% profit, profits reach $50 BILLION. This creates a market cap of almost $5 trillion! And this is just vehicle sales. Not Robotaxi network revenue or energy revenue! The market cap could be three times $5 trillion! In case you were wondering a $5 trillion market cap translates to a share price of about $24,000 per share in 2026 (based on the ratio of 2020 estimated EPS to current market cap). Okay, this is way out of the park. Most analyses come up with $2,000 to $6,000 per share in five years. Listen to the earnings call and do your own calculations. What is your estimate for stock price in 2026?

 

[WilliamG]

Hi, Elon. Must be a slow night for you.

 

[jonquiljo]

Everyone else cannot do this. You clearly work for Tesla which is where options to buy at $250 come from. The rest of us have to buy "today" at $650 - far more than you will pay. This is why you have the stock options that are called "incentive" stock options.

I would also factor income taxes into your calculations. Right now we pay 20% Federal capital gains tax (long term) and NIIT of 3.8% for any gain over $250,000. In California, you will pay a state tax at full income rates. That's over 10.3% over a million, etc. Taxes can/will take a big bite out of your gain.

By 2026, it is even possible that the Federal capital gains tax will go from 20% to full income rates - which will likely be a lot higher than today.

I'm not going to make predictions about Tesla in several years. What I will say is that our governments always find ways of taking the fun out of making a lot of money. Good luck!

 

[AlanSubie4Life]

You clearly work for Tesla which is where options to buy at $250 come from.

Anyone can buy options. In June/July those would have been out of the money a bit. Certainly anyone could have purchased them. It’s the way to make a bunch of money, or have them expire and lose all your money.

 

[jonquiljo]

Anyone can buy options. In June/July those would have been out of the money a bit. Certainly anyone could have purchased them. It’s the way to make a bunch of money, or have them expire and lose all your money.

Yes ... I goofed. I'm so used to incentive options and tech companies that I forgot that there are simple options out there. My bad!!!

Oh well, the government still gets a good chunk of your money no matter what you do. You can have a high net worth if you have a lot of unrealized gains. But as soon as you "realize" them, all hell breaks loose.

 

[jjrandorin]

This OP is either pulling our leg, or making one of the most blatant "humblebrags" I have ever seen.

 

[AlanSubie4Life]

Oh well, the government still gets a good chunk of your money no matter what you do

That’s ok; they deserve it for all they have done and continue to do for me.

 

[AlanSubie4Life]

This OP is either pulling our leg, or making one of the most blatant "humblebrags" I have ever seen.

@Daniel in SD should have taken his own advice...would be worth $133k...options bought in June would be even better.

I think this investment is likely even better than the investment in FSD that Elon talks about. Certainly it had a faster ROI.

 

[Evoforce]

My thought is: Car loans are so cheep, why would you not keep your money in the stock instead of paying cash for the car? Say a 3% car loan compared to what % you would lose by pulling your likely high percentage future return on Tesla stock. Same advice I would give to those who would pay off their low interest mortgage. Of course, you would need to have the resources to make the monthly payment. Keep leveraging your money I would say. My profession is not an accountant or financial planner.

 

[KenC]

Anybody else doing this?

I have a Model 3.

In June I invested heavily in Tesla stock options (option to buy Tesla stock in Jan 2021 and 2022 for $250).

Now I have earned enough to pay for the Model 3 that I have. I am well on my way to earning enough for the eight Cybertrucks I have on order and the Semi I have on order (actually the orders are more like reservations). It looks like the timing will work out.

Anybody else out there investing in Tesla so that the profits pay for buying the Tesla?

If you are wondering, I am still buying Tesla stock options (Tesla currently at $650) and going to several thousand in a few years.

According to Elon Tesla will deliver at least 500,000 cars in 2020 (production capacity is currently 640,000 per the table in the earnings report so 500,000 is conservative). Elon says 50% growth in sales per year is easily achieved (last five years growth in sales averaged 64% each year with the last year seeing 82% growth - so 50% is conservative). If you compound the growth in sales, Tesla will be selling 5 million cars and trucks in 2026! At $50,000 each on average, this adds to $250 BILLION in sales and at 20% profit, profits reach $50 BILLION. This creates a market cap of almost $5 trillion! And this is just vehicle sales. Not Robotaxi network revenue or energy revenue! The market cap could be three times $5 trillion! In case you were wondering a $5 trillion market cap translates to a share price of about $24,000 per share in 2026 (based on the ratio of 2020 estimated EPS to current market cap). Okay, this is way out of the park. Most analyses come up with $2,000 to $6,000 per share in five years. Listen to the earnings call and do your own calculations. What is your estimate for stock price in 2026?

Bought Tesla shares for one minute. Made 20%, sold and made my Model 3, $10k cheaper. Yeah, one minute. When Elon got sued by the SEC, I figure his lawyer would get him to settle over the weekend, and the stock would rebound on Monday, so I bought 200 shares in the last 10 secs of Friday. Elon settled on Saturday, and the stock was up $50 at market open, when I sold, so I owned it for less than one minute during market hours.

 

[puckpurnell]

Bought TESLA in June at $200. Up 220%. Will hold for long term just like our Apple which is up 480%.

 

[Cohiba]

Bought Tesla shares for one minute. Made 20%, sold and made my Model 3, $10k cheaper. Yeah, one minute. When Elon got sued by the SEC, I figure his lawyer would get him to settle over the weekend, and the stock would rebound on Monday, so I bought 200 shares in the last 10 secs of Friday. Elon settled on Saturday, and the stock was up $50 at market open, when I sold, so I owned it for less than one minute during market hours.

That $53k of stock is now worth about $130k. Sometimes it's better not to sell