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Fund a big percent of your M3 purchase by buying Tesla Stock

Discussion in 'Model 3' started by MitchJi, Sep 4, 2016.

  1. MitchJi

    MitchJi Active Member

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    I am sharing information and opinions which I believe is very close to a slam dunk. But please be careful with your hard earned money. Please do your own research and DD before investing. Please don't invest money that you can't afford to lose!

    That said, in the past quite a few TMC Members funded their Model S purchases by buying TSLA. I believe that buying shares to fund a Model 3 purchase is extremely safe, almost as safe as shooting fish in a barrel. OTOH between now and whenever Tesla has produced over 100k M3's I think it could be a bumpy ride, which means that even though I believe that shares purchased now, for about $200 will be worth at least $350 when the M3 production has ramped, I would not be shocked if it dips to $150 at some point between now and then. If that would be stressful for you I'd advise you not to do this!

    It also means that buying options is a much riskier strategy. Please don't buy options unless you are very knowledgeable! I'll might post on this thread when and why I believe buying options is relatively safe. In the meantime educate yourself as much as possible about investing in general, and about investing in TSLA.

    It's important to note that a major reason that this opportunity is so huge are the problems Tesla has had ramping the MX production. This was due to the fact that the MX is an extremely difficult car to build. If they had designed and built a conventional SUV, which would have been about as difficult to build as the MS there is every reason to think that the results would have been similar.
    Tesla sold more than 50,000 Model S sedans in 2015, a new annual record
    Income (profits), driven by car sales, has always been the major determinant of Tesla's share price (SP).

    From "Elon Musk" by Ashlee Vance Page 342:
    Elon's projection for 2018 MS-MS plus M3 production:
    To put the effect of the M3 on the SP in perspective a major issue now for the SP is the ability of Tesla to produce 50k cars in the second half of 2016. When they have the M3 production line running smoothly they will be producing over 40k per month off MS-MS plus M3! Even if that slips by 12-24 month's (chances close to zero IMO), that only delays the SP increase.

    In the very near future stationary storage (TE) will start to have a huge impact on profits. At the 2016 shareholders meeting Elon said that (he said this was highly speculative) that he thinks that the revenue from TE will be equal to the revenue from cars, and that it will grow faster. That would be the revenue equivalent to 250k (projected) cars in 2017.

    The following estimate for SP, based higher vehicle deliveries, and not considering the impact of Tesla Energy Storage (TE) was posted on Jan 6, 2014. about 2 years before the M3 reveal, and the accelerated ramp plans were announced.
    Notes:
    1. I added numbers in brackets "projected by Elon", next to DaveT's numbers.
    2. If we add the TE revenue equivalent to about 250k cars to Elon's projection of 500k cars we have revenue in 2018 that is greater than the the 700K cars number that DaveT used to calculate his 2019 projected conservative SP of at least $630/share!

    3. Even if Tesla sells zero M3's in 2018, between the MS-MX and TE their revenue should be equal to roughly 400k cars, for an SP of about $360!

    In other words, if you are saving for an M3 you have a double hedge when buying TSLA. When the M3 ramps the SP will rise, and even if M3 is never produced at all (not going to happen) TE production will cause the SP to rise.
    Articles/megaposts by DaveT

     
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  2. Drivin

    Drivin Member

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    Think Bigger: You can use the Model E money and just buy and hold until TSLA gets to the $1T dollar valuation and then buy a couple Model S's and a Model X for weekends.

    What would their P/E ratio be at that point and what comparable are you using to come up with $360 SP?
     
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  3. CmdrThor

    CmdrThor Member

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    I would think most Model 3 buyers would have to put too large of a percentage of their investment money in Tesla stock in order to pay for a large chunk of their Model 3.

    I would also view an investment in TSLA as more of a long term thing than something to be cashed out in ~2 years.

    Because of these things, I would suggest not trying to correlate a new car purchase and an investment in a company's stock.
     
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  4. jelloslug

    jelloslug Member

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    I funded the large downpayment for my Model S with TSLA stock earnings.
     
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  5. Spidy

    Spidy Member

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    +1


    I think

    are a direct contradiction People who can afford to lose that much money already brought a Model S.
     
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  6. 22522

    22522 Member

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    I did exactly that, bought Tesla stock last Monday. Hoping it could help me pay for the ordered 3.

    Was trying to find a way to put the money toward Tesla goals rather than in the bank.
     
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  7. MitchJi

    MitchJi Active Member

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    #7 MitchJi, Sep 4, 2016
    Last edited: Sep 4, 2016
    Two comments:
    1. Quite a few people have are setting aside savings for an M3 purchase. TSLA should return way more than a money market fund.

    2. I agree with Marc Cuban:

    That's generic advice, If you want to save for an M3 and you believe that TSLA will be close to $200 after the M3 is in production, then don't do it.
     
  8. TrendTrader007

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    i totally agree that Tesla stock is great investment for the next several years for all the reasons that you guys mentioned above. i would not be surprised at all to see this stock double or triple from current levels by 2018 and over the next decade or so this thing could easily be a 10 bagger
    i stay super long for a long time
     
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  9. RubberToe

    RubberToe Supporting the greater good

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    I'm trying this to pay for my Model 3. At the current rate, if I'm lucky, I might have enough left to only upgrade Mrs. Toe's battery to the bigger one. On the bright side, all the options I bought will buy us some burgers and fries at the Shake Shack across the street from the Fremont factory when we pick up her car. Yay!

    Maybe she will even let me drive it on weekends!

    RT
     
  10. CmdrThor

    CmdrThor Member

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    It should yes. But those who bought in at $271 probably aren't realizing those returns anytime soon. Many around here talk about TSLA with emotion more than good financial sense. While I think Tesla will be successful in the long run, they have seen many bumps in the road and probably will continue to for a while.
     
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  11. FirstSea

    FirstSea Member

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    I have some of my Model 3 money in TSLA, yet I don't want to put all my eggs in a single basket, specially if I can cash out on other, less volatile, stocks.
     
  12. Big Dog

    Big Dog Member

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    I bought TSLA last year but will be selling shortly at a loss to tax harvest, way before my M3 comes rolling off the line.

    Will be selling since I do not believe in the SolarCity buyout. IMO, it will be a significant drag on the car business. I just don't seen the purpose.
     
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  13. MitchJi

    MitchJi Active Member

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    Given that Tesla is currently producing about 25k cars per quarter and to get your car before about 2020 Tesla will be producing something like 25k per month why do you believe that your M3 can roll off the line and the stock price not be higher than it is now?
     
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  14. Big Dog

    Big Dog Member

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    Mitch, I should have been more clear I earlier:

    "SolarCity buyout. IMO, it will be a significant drag on the car business." Really, a drag on earnings that will be reflected in the stock price.
     
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  15. xav-

    xav- Member

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    When a legendary short seller like James Chanos is on the other side I would rather stay out.

    What you guys don't get is that tesla can be worth $1 trillion dollars while the stock price stays flat. Thats a big difference from Google for instance. They can't grow without investing a lot of capital. They are going to print much more shares.
     
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  16. MikeDog77

    MikeDog77 Member

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    I have some TSLA shares which I tell my wife is for the M3, but technically if the time comes to take delivery of the M3 I will probably be hanging on to the stock. I considered dumping a lot more into the stock but I am worried about putting too many of my eggs in one basket. I would gladly miss out an earning opportunity in order to get my bad ass Tesla for 35-45k. The only thing that scares me is that Elon is trying to save the world and produce millions of EV's and not necessarily make money. Making money is just a way to get to his goal of saving the world and possibly the human race.

    That said I have a good friend that works for a large auto supplier. He is moving and taking a two year assignment oversees. He sold his house and will live in corporate paid housing for 2 year but is dumping all the profits from the sale of his house into TSLA. Needless to say he is a big believer, and while he has no specific inside information, he has been around Tesla and the industry enough to believe in them.
     
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  17. Garlan Garner

    Garlan Garner Active Member

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    I agree...and unfortunately the stock price has taken a larger hit recently.
     
  18. MitchJi

    MitchJi Active Member

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    That's actually fortunate if you've got cash and you want to save for an M3.
     
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  19. Garlan Garner

    Garlan Garner Active Member

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    true. I agree.
     
  20. Matias

    Matias Active Member

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    #20 Matias, Sep 5, 2016
    Last edited: Sep 5, 2016
    Exactly two years ago Tesla's closing price was 277.39. Exactly one year ago it was 241.93.
     
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