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

[wycolo]

Put your money in a GNMA fund so it will *be there* when you buy your M3. You will also earn DIVs which will compound.

TSLA (the stock) is going nowhere anytime soon. It is now institutionalized such that all the tasty volatility is a thing of the past. Just
sold mine to put into a house. The house will probably be worth a lot more in 10 years than its TSLA equivalent (I'll be keeping track).

Options, Puts, Calls etc: sure, lead these lambs to the slaughter!!
--

 

[Big Dog]

You will also earn DIVs which will compound.

After-tax dividends will compound, sure, but so will the taxes due. (Not a fan of such investments in taxable accounts; better to put them in tax-advantaged accounts. Bu then the $$ is not readily available for the M3 purchase.)

 

[mhan00]

I'm sorry, this is foolish advice. There is absolutely no guarantee anyone will be able to fund anything by buying Tesla stock now with the purpose of selling it next year to buy a III. The days of Tesla being sold at 30 bucks a share are long gone. The price it's selling at now is already taking into account the Model III being a success, because their current sales in no way justifies the price now. If you invest now, you're basically gambling with your money against speculator interest, and it's a guarantee your return won't be anywhere near what the people who did fund their Model S purchases with Tesla stock got.

If you're buying Tesla now, then you should be doing so because you're either going to hold it long because you believe in the company (like me) or you should be an experienced day trader with sufficient experience and bankroll to try to play the short term movements of the stock. If you need to fund your Model III purchase over the next year or two with gains from Tesla stock, A) you probably don't have enough money to make enough off of capital gains from the stock to buy one anyway and B) are just as likely to lose money as make it, unless you have inside information that the rest of us aren't privy to.

 

[Canuck]

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

Buying TSLA does not go towards Tesla. It's only during an initial public offering that share prices are used to raise money for the company such that buying shares helps a company. After that, the stock goes up and down by means of the free market. The share price neither helps nor hurts the company. Only the shareholders of the stock are affected.

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?

Because the share price now is so over-inflated it has already taken that into account in the price per share TODAY.

Buying shares in any company is gambling, plain and simple. If you are smart, like a smart gambler, you can play the odds and decrease the risk, but there's never any guarantee of success. It's usually best to pay down the mortgage, credit cards, and all other debt, and when you are debt free and have money to play with, then take a look at the stock market. In my view, income generating property is a safer bet, and once that pays off you can use those earning to invest in the stock market, as a further safety buffer, but if you don't have a lot of money and still have debt, I think it's poor advice to tell someone to gamble their hard earned money on TSLA or any other stock. Those are the suckers the skilled players of the market are taking money from, just like the novice sitting down at a casino table in Las Vegas.

 

[3Victoria]

Agree that one should pay down debt first, and only invest what you can afford to lose. However, I do not think that 3 production is baked into the present SP and I do think that actual 3 production will ramp the SP.

 

[mhan00]

Probably a more direct way of funding Tesla, if you want to, would be to buy Solar City bonds since Tesla is supposed to buy them. They offer incredibly good rates since their bonds are either junk status or close to. I don't know if they're still available, but if you don't mind risking your money to fund Tesla, that might be the best way to do it, assuming the sale goes through.

 

[Canuck]

I do not think that 3 production is baked into the present SP

You must be joking? The price of TSLA today is so completely baked into production of the Model 3 it is debatable that production of the Model 3 will even serve to raise the share price...

Can the Model 3 Keep Tesla’s Stock Price Soaring?

How Will The Model 3 Launch Affect Tesla (TSLA) Stock?

 

[3Victoria]

That was a response to the reveal, not production.

 

[abasile]

Buying TSLA does not go towards Tesla. It's only during an initial public offering that share prices are used to raise money for the company such that buying shares helps a company. After that, the stock goes up and down by means of the free market. The share price neither helps nor hurts the company. Only the shareholders of the stock are affected.

In a direct sense, that may be true. However, maintaining a high share price helps Tesla to raise cash through subsequent offerings and/or to borrow with favorable terms. The more shares that are held "long", the fewer that are available on the market to trade and the higher the share price will tend to be.

 

[Canuck]

That was a response to the reveal, not production.

Of course, because there is no production yet. But all you need to do is look at TSLA's P/E ratio to know that the stock price today is based completely on production of the Model 3. I can't even believe I'm having this discussion, it's so obvious. Elon Musk has even said it won't be until 2020 that Tesla turns a profit so what else could have TSLA at such a high number given its low P/E ratio? Maybe anticipated production of the Model 3?

In a direct sense, that may be true. However, maintaining a high share price helps Tesla to raise cash through subsequent offerings and/or to borrow with favorable terms. The more shares that are held "long", the fewer that are available on the market to trade and the higher the share price will tend to be.

Yes, true. There is an indirect benefit. Also, employees who hold stock or stock options make for a better company when share prices rise.

But I was responding to the widely held notion that when you buy TSLA shares you are giving money to Tesla. A lot people hold that erroneous view, as if the company is issuing the shares to them when they are purchasing, so they are furthering Tesla's mission, and that is not case, except in an indirect way, as you point out.

 

[22522]

I don't understand why Tesla wouldn't buy Solar City at the bottom of the market. Is there some intellectual property missed out on if they just wait?

 

[Matias]

I don't understand why Tesla wouldn't buy Solar City at the bottom of the market. Is there some intellectual property missed out on if they just wait?

If Solar City would go to bankruptcy, it would default the bonds, that SpaceX has bought?

 

[22522]

If Solar City would go to bankruptcy, it would default the bonds, that SpaceX has bought?

Does buying Solar City solve a "house of cards" problem for Tesla?

... Essentially buying time for the Model 3 revenue to glue everything together?

 

[JeffK]

Does buying Solar City solve a "house of cards" problem for Tesla?

... Essentially buying time for the Model 3 revenue to glue everything together?

Buying SolarCity guarantees a larger market for Tesla energy thus making Tesla more valuable. SolarCity has it's own gigafactory in the works for solar panels.

If the price for solar were all of a sudden much cheaper as utilities get off net metering and the tax credits expire then the market for residential solar will increase. If they don't get cheaper the residential solar market will crash and burn (at least in the US) if utility companies get their way.

SolarCity is starting to get very large solar contracts from local governments. It'd be really nice to tie this in with Tesla power racks instead of letting another competitor come in with an alternative storage solution.

 

[TrendTrader007]

TSLA has been range bound for the last 32 months, going nowhere fast. This is a bullish sign in my opinion because the stock is simply digesting its enormous 2013 gains and forming a multi year base. The fact that I it has been going down for the last 5 quarters is also bullish because when (and not if) it breaks to upside, the next stock move will be equally enormous over the next several quarters

 

[EinSV]

Of course, because there is no production yet. But all you need to do is look at TSLA's P/E ratio to know that the stock price today is based completely on production of the Model 3. I can't even believe I'm having this discussion, it's so obvious.
<snip>

I disagree.

Virtually no one predicted that pre-orders for the Model 3 would be anywhere near what they were. Yet when Tesla announced it would increase production to meet those orders the stock price actually dropped. There has not been a share price increase to match the increased number of Model 3s that Tesla is now preparing to produce. In fact, the share price on March 30 -- before the reveal -- was higher than it is today.

So while some future growth is baked into the share price, the full impact of Model 3 is not. Not even close IMO.

 

[TrendTrader007]

I disagree.

Virtually no one predicted that pre-orders for the Model 3 would be anywhere near what they were. Yet when Tesla announced it would increase production to meet those orders the stock price actually dropped. There has not been a share price increase to match the increased number of Model 3s that Tesla is now preparing to produce. In fact, the share price on March 30 -- before the reveal -- is higher than it is today.

So while some future growth is obviously baked into the share price, the full impact of Model 3 is not. Not even close IMO.

I agree with you. TSLA price currently probably reflects all the uncertainties and misgivings that investors have rather than all the success that this company is on the verge of having. Once the market realizes what could go right instead of what could go wrong(as current stock price reflects) then TSLA will finally break out to upside and scale unprecedented heights. This could happen sooner and faster than most investors realize a stock price of $500 is not out of question by 2018 or so

 

[tsla007]

Well, I sold all 33k shrs not long ago. Why? Cash burn is huge. Model 3 will put huge funding issues for parts just like X had. Yeah I know he said keep it simple but he needs to wow people. If preorders where around 100k-I'd still be holding, but they skyrocketed to 400k. Now, long term-holding isn't a bad thing, but short term-you're going to feel some serious pain. More dilution is inevitable, aquiring SC (solar city) debt, a secondary was at 225 and those investors are probably really ticked off right now. If Elon can deliver M3 quickly and on time so all of them get tax incentives (not full but partial) the stock price will go up quickly as he silences nay sayers. A squeeze would happen as well. My advice if you're long-certify your shrs so those pesky day traders won't use your shrs to short it or make calls. This maximizes the squeeze when it happens (lowers the float and we can demand a higher price for shrs as those available are very low volume). As for me-I'm all out. I'm holding raw materials and big cap stocks for divs. I'll buy back at about 150 or so. If it doesn't go that low-I'll probably never buy it back. I've made my money here at 27.xx to 221.xx. GLTA. (good luck to all)

 

[FirstSea]

If I remember correctly, Elon stated he wanted/needed to show at least some positive cash flow for the third quarter, since Tesla was going to need a capital raise in the fourth quarter. Yet, he said that prior to the SC deal...

 

[Big Dog]

Buying SolarCity guarantees a larger market for Tesla energy thus making Tesla more valuable. SolarCity has it's own gigafactory in the works for solar panels.

Perhaps, but right now, solar is a commodity business, and Elon could have easily just put out an RFP and contract with the lowest bidder.

But, if the price of solar cell/installation plummeted, it would expand the market. But labor is labor, and the install costs was go down much, so SolarCity would have to work miracles in production that are better than what is happening overseas. And I'd be hard pressed to see Buffalo production beating out that in Asia.)

If the price for solar were all of a sudden much cheaper as utilities get off net metering and the tax credits expire then the market for residential solar will increase.

However, I don't understand this part at all. If tax credits go away, the price to the individual homeowner will increase. When prices go up, you get less installations. (Opposite of above.) If net metering goes away, (which it won't in politically-green states like California for a long time), the cost to the homeowner also increases, does it not? (Right now, those homeowners running a surplus of solar power, get a credit based on full retail. If that credit drops to say wholesale, the costs increase.)