Tesla has a very important mission: to accelerate the world's transition to sustainable energy. It already has had a tremendous impact and is disrupting an automobile industry that up to now has been hell-bent on accelerating destructive climate change.
Tesla is also in the process of accelerating the transition of the planet's electric power from dirty coal and natural gas to clean solar and wind by providing the key missing ingredient -- inexpensive batteries that allow these renewables to be used for cheap baseline power.
It seems clear to me that Tesla is also on a path toward tremendous financial success. The Model 3 is a home run and Tesla's ambitious gross margin targets have been validated by two separate independent groups of engineers -- Sandy Munro and engineers hired by German big auto (Mercedes, BMW or Audi).
Strangely enough, Munro was forced to clam up by the threat of legal action if he kept reporting his positive conclusions. The financial press has been remarkably uninterested in pursuing that tantalizing story. The U.S. press has also, strangely enough, refused to publish anything about the German engineers' report. That is especially odd since that report was widely reported in Germany and apparently freaked out the German auto industry, which was forced to realize the threat from Tesla was even more real than they imagined.
Model 3 teardown in Germany finds that Tesla's cost of materials is $18k, cost of production $10k (and that's w/ a $50k+ early production Model 3) : teslamotors
Tesla Model 3: Ingenieure finden unbequeme Wahrheit im Auto - manager magazin
Tesla Model 3 analysis triggers legal woes for teardown expert Sandy Munro
Tesla's battery business also appears positioned to go through the roof, with demand stratospheric and Tesla emerging as the clear industry leader. Tesla's known product pipeline -- Model Y, Semi, Pickup, Solar Roof, a lower priced sedan -- looks incredible and Tesla has teased that there are some other products in the works as well. No one knows for sure who will emerge as the industry leader in self-driving, but Tesla appears very well-positioned. Creating and developing what may turn out to be the industry-leading self driving chip out of whole cloth is another exciting development no one in the press seems interested in talking about.
Bottom line: with Model 3 now emerging from production hell, Tesla is extremely well positioned to accelerate the world's transition to sustainable energy while delivering outsized returns to shareholders.
But there is a problem. Shortsellers, the financial press, impatient and shortsighted investors. And now the SEC. The main risks to Tesla's mission are not operational, but a direct result of being a U.S. listed public company.
Those of us who have been watching Tesla for a long time (I started following Tesla when it formed and visited the old San Carlos facility in ~2006 when it had 6 Roadster prototypes) realize how difficult and improbable it has been to achieve what Tesla has accomplished so far, and how important Elon has been to that success.
With the current pipeline, Tesla may be at a stage where someone else could take over and it would be fine. But without Elon leading the charge there is no way it could keep growing at the pace it has, and more importantly accelerating the transition to sustainable energy at the pace it has.
I posted in another thread the remarkable statistic that after this quarter's results are in Tesla's revenues will likely have grown 75% (or more) annualized over the past 1, 2 and 3 year periods. Tesla is an Undervalued Growth Juggernaut
That is staggering, mind-bending, unprecedented growth for a company this size -- roughly triple the rate of amazing growth companies like Amazon and Netflix that have historically grown at closer to 25% annually. Yet we hear nothing of this in the press either.
This sort of growth has only been possible by taking big risks. Like doubling the "impossible" 2020 target of 500,000 vehicles per year to 1 million per year. This was risky, and resulted in a messy, stressful production hell. But even if Tesla falls short of the 1 million car per year target, Tesla is on a path to greatly exceed its original "impossible" target. Another incredible result that a "normal" company and "normal" CEOs would never have accomplished. Almost anyone else would have settled for much lower growth rates because there would be less stress and drama. Less opportunity for the press and short sellers to attack the company. Fewer investors freaking out over bumps in the road.
Tesla needs Elon Musk at the helm to continue that incredible growth, and to achieve Tesla's mission of accelerating the world's transition to clean energy. That is getting harder and harder as a public company. Short sellers know what a huge threat Elon is to them and attack him relentlessly, and the press plays along, while ignoring Tesla's many accomplishments.
And let's be honest, Elon's personality is better suited for a private company than a public one. Yes it would be better if he stopped tweeting about pedos, the SEC, etc. but that's been obvious for a while and it hasn't happened. If Tesla were private, most of these issues would disappear, Elon's stress level would drop like a rock and the focus could return to Tesla's products, which are amazing.
Elon had valid reasons for pulling the plug on going private. Many investors preferred staying public and many retail and institutional investors could not be shareholders in a private company. It also appears the new shareholder group was not the right mix (too much ICE). But there was tremendous pressure to get a deal done quickly. With more time to quietly lay the groundwork, I suspect a much stronger group of go-private investors could be put together. And with more time, perhaps some clever lawyers and investment banks could create a structure or an investment product that would allow more current institutional and retail investors to own TSLAP stock.
But even if there is no solution that allows all current investors (including me) to stay with a private Tesla, I think the best course is still for Tesla to be taken private. The developments since Elon's decision to stay public -- including not only the predictable attacks by the press and short sellers, but the SEC being co-opted by short sellers and recklessly destroying shareholder value through overzealous enforcement -- are cause to reconsider.
In my opinion, Tesla would be in a much better position to achieve its mission as a private company. Without a $10 billion market cap short seller PR syndicate with nothing better to do than trash the company 24/7. And without an SEC that seems to have forgotten its mission and either does not care about the interests of shareholders or is just incompetent.
Tesla would also be in a much better position to generate returns for shareholders. That may be a different mix of shareholders for a few years, but Tesla can again IPO when it has matured and is less of a target for short sellers. Who knows, maybe Tesla departing the markets would even spark some reforms and either eliminate short selling or make it less toxic.
I personally would be very disappointed if I could not be a shareholder for the next few years since I believe Tesla is poised to achieve great things. But to me Tesla's mission should be top priority. If Tesla were taken private near or above all-time highs, investors who could not participate in a private TSLA might be disappointed but would be hard-pressed to argue they were treated unfairly.
Elon: please reconsider and take Tesla private.
Tesla is also in the process of accelerating the transition of the planet's electric power from dirty coal and natural gas to clean solar and wind by providing the key missing ingredient -- inexpensive batteries that allow these renewables to be used for cheap baseline power.
It seems clear to me that Tesla is also on a path toward tremendous financial success. The Model 3 is a home run and Tesla's ambitious gross margin targets have been validated by two separate independent groups of engineers -- Sandy Munro and engineers hired by German big auto (Mercedes, BMW or Audi).
Strangely enough, Munro was forced to clam up by the threat of legal action if he kept reporting his positive conclusions. The financial press has been remarkably uninterested in pursuing that tantalizing story. The U.S. press has also, strangely enough, refused to publish anything about the German engineers' report. That is especially odd since that report was widely reported in Germany and apparently freaked out the German auto industry, which was forced to realize the threat from Tesla was even more real than they imagined.
Model 3 teardown in Germany finds that Tesla's cost of materials is $18k, cost of production $10k (and that's w/ a $50k+ early production Model 3) : teslamotors
Tesla Model 3: Ingenieure finden unbequeme Wahrheit im Auto - manager magazin
Tesla Model 3 analysis triggers legal woes for teardown expert Sandy Munro
Tesla's battery business also appears positioned to go through the roof, with demand stratospheric and Tesla emerging as the clear industry leader. Tesla's known product pipeline -- Model Y, Semi, Pickup, Solar Roof, a lower priced sedan -- looks incredible and Tesla has teased that there are some other products in the works as well. No one knows for sure who will emerge as the industry leader in self-driving, but Tesla appears very well-positioned. Creating and developing what may turn out to be the industry-leading self driving chip out of whole cloth is another exciting development no one in the press seems interested in talking about.
Bottom line: with Model 3 now emerging from production hell, Tesla is extremely well positioned to accelerate the world's transition to sustainable energy while delivering outsized returns to shareholders.
But there is a problem. Shortsellers, the financial press, impatient and shortsighted investors. And now the SEC. The main risks to Tesla's mission are not operational, but a direct result of being a U.S. listed public company.
Those of us who have been watching Tesla for a long time (I started following Tesla when it formed and visited the old San Carlos facility in ~2006 when it had 6 Roadster prototypes) realize how difficult and improbable it has been to achieve what Tesla has accomplished so far, and how important Elon has been to that success.
With the current pipeline, Tesla may be at a stage where someone else could take over and it would be fine. But without Elon leading the charge there is no way it could keep growing at the pace it has, and more importantly accelerating the transition to sustainable energy at the pace it has.
I posted in another thread the remarkable statistic that after this quarter's results are in Tesla's revenues will likely have grown 75% (or more) annualized over the past 1, 2 and 3 year periods. Tesla is an Undervalued Growth Juggernaut
That is staggering, mind-bending, unprecedented growth for a company this size -- roughly triple the rate of amazing growth companies like Amazon and Netflix that have historically grown at closer to 25% annually. Yet we hear nothing of this in the press either.
This sort of growth has only been possible by taking big risks. Like doubling the "impossible" 2020 target of 500,000 vehicles per year to 1 million per year. This was risky, and resulted in a messy, stressful production hell. But even if Tesla falls short of the 1 million car per year target, Tesla is on a path to greatly exceed its original "impossible" target. Another incredible result that a "normal" company and "normal" CEOs would never have accomplished. Almost anyone else would have settled for much lower growth rates because there would be less stress and drama. Less opportunity for the press and short sellers to attack the company. Fewer investors freaking out over bumps in the road.
Tesla needs Elon Musk at the helm to continue that incredible growth, and to achieve Tesla's mission of accelerating the world's transition to clean energy. That is getting harder and harder as a public company. Short sellers know what a huge threat Elon is to them and attack him relentlessly, and the press plays along, while ignoring Tesla's many accomplishments.
And let's be honest, Elon's personality is better suited for a private company than a public one. Yes it would be better if he stopped tweeting about pedos, the SEC, etc. but that's been obvious for a while and it hasn't happened. If Tesla were private, most of these issues would disappear, Elon's stress level would drop like a rock and the focus could return to Tesla's products, which are amazing.
Elon had valid reasons for pulling the plug on going private. Many investors preferred staying public and many retail and institutional investors could not be shareholders in a private company. It also appears the new shareholder group was not the right mix (too much ICE). But there was tremendous pressure to get a deal done quickly. With more time to quietly lay the groundwork, I suspect a much stronger group of go-private investors could be put together. And with more time, perhaps some clever lawyers and investment banks could create a structure or an investment product that would allow more current institutional and retail investors to own TSLAP stock.
But even if there is no solution that allows all current investors (including me) to stay with a private Tesla, I think the best course is still for Tesla to be taken private. The developments since Elon's decision to stay public -- including not only the predictable attacks by the press and short sellers, but the SEC being co-opted by short sellers and recklessly destroying shareholder value through overzealous enforcement -- are cause to reconsider.
In my opinion, Tesla would be in a much better position to achieve its mission as a private company. Without a $10 billion market cap short seller PR syndicate with nothing better to do than trash the company 24/7. And without an SEC that seems to have forgotten its mission and either does not care about the interests of shareholders or is just incompetent.
Tesla would also be in a much better position to generate returns for shareholders. That may be a different mix of shareholders for a few years, but Tesla can again IPO when it has matured and is less of a target for short sellers. Who knows, maybe Tesla departing the markets would even spark some reforms and either eliminate short selling or make it less toxic.
I personally would be very disappointed if I could not be a shareholder for the next few years since I believe Tesla is poised to achieve great things. But to me Tesla's mission should be top priority. If Tesla were taken private near or above all-time highs, investors who could not participate in a private TSLA might be disappointed but would be hard-pressed to argue they were treated unfairly.
Elon: please reconsider and take Tesla private.
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