How Many Car Orders is the Rising Stock Price Creating?

[Cattledog]

TSLA is now up nearly 50% from its low of the year in early January, and about 70%-100% from where it hovered most of the past year and a half before that. My question is:

How many new purchases is the appreciating stock price creating?

We've read about a lot of people on the forums saying the stock appreciation was funding their purchase. Many Tesla rank and file employees, critically important employees like factory workers, technicians, salespeople (gallery operators in Texas) perhaps have a stock plan in which they are participating (does anyone know?). Between what we've read and an assumption on my part that Tesla employees may be seeing reasonable financial gains from the stock price, how many orders are being driven by the value of appreciating stock?

1,000/yr.? More, less? Not huge, probably aptly characterized as a large blip if it's in this realm. I dunno.

Thoughts?

 

[Bardlebee]

This is an interesting thought. Though I guess its dependent on how much they put in and by that how much they get in return. I got stock for the purpose of using it on a Model S as well. But now that I see it go higher and higher, I am more inclined to just keep the stock and have a much lower car payment. I am shooting for no more then 700 a month.

So for me at least, I may just buy more stock over the next year to simply keep saving and who knows, maybe I will just buy the car out right! But if I could do that I might as well pay off the rest of my house, hah!

 

[bonnie]

I'd guess there is some correlation, but more likely because of the coverage TSLA is getting in investor sites. People read about it, decide to check out the product and learn a little more about the company before deciding whether or not to invest -- and then get interested in the product AND the stock.

 

[CyberDutchie]

Stock gains paid for only a small portion of my Model S -- an upgrade or two. I held TSLA for about a year and sold when the check was due, and the stock hit $35, a 15% gain in my case. I think that's probably the most common scenario.

Who has $100k sitting around to invest with the sole purpose to pay for the car? And then they would have had to buy at the lows and the patience to wait long enough to realize the 70-100% gain.

Would be nice though to hear from someone who paid for the car solely from profits on TSLA stock.

 

[Bardlebee]

I'd guess there is some correlation, but more likely because of the coverage TSLA is getting in investor sites. People read about it, decide to check out the product and learn a little more about the company before deciding whether or not to invest -- and then get interested in the product AND the stock.

I can see this to be true. Not to generalize but those who are investing in general probably have the additional income to consider the Model S.

EDIT: @Mulder: I think your situation is going to be the most common. Such as yourself I too am using a portion of my stock for the car, but I don't expect to cover the whole thing. I think a lot of people fall into that where they want to hit a certain number before putting down a reservation. I have realized 50+ percent so I am quite happy, though I wish I had more money in there for it to mean more.

 

[ibcs]

After the April 1st run, I was able to cash out completely with the Model S paid for in full including service contract for 8 years. I wrote a check from my trading account for the balance of the loan. I felt very lucky and will not be trading the rest of the year except in retirement accounts. At points, I was down almost a whole Tesla mildly put it was a wicked stock ride.

 

[smartypnz]

42 is the answer

 

[CyberDutchie]

After the April 1st run, I was able to cash out completely with the Model S paid for in full including service contract for 8 years. I wrote a check from my trading account for the balance of the loan. I felt very lucky and will not be trading the rest of the year except in retirement accounts. At points, I was down almost a whole Tesla mildly put it was a wicked stock ride.

Wow, congratulations, that's awesome! Must feel like a gift from Elon!

 

[aronth5]

I can see this to be true. Not to generalize but those who are investing in general probably have the additional income to consider the Model S.

EDIT: @Mulder: I think your situation is going to be the most common. Such as yourself I too am using a portion of my stock for the car, but I don't expect to cover the whole thing. I think a lot of people fall into that where they want to hit a certain number before putting down a reservation. I have realized 50+ percent so I am quite happy, though I wish I had more money in there for it to mean more.

Agree.
It will also be interesting to hear from anyone planning on using their stock gains to fund a portion of the Gen3 car. In 3-4 years there may be many who can fund a good portion. It least that is my hope. Certainly would be nice to go into retirement without a car payment:smile:

 

[strangethingintheland]

Would be nice though to hear from someone who paid for the car solely from profits on TSLA stock.

I'm not exactly the answer you're looking for, but I'll bite anyway. I bought $25,000 of TSLA about a year ago, giving me a cost basis (averaged over two tranches) of $31.33. My plan all along has been in five years or so to use a *portion* of my gains to buy one of the first Gen III cars with the self-driving package, and give it to my father. If the stock is where I expect it to be when Elon hits all of his personal stock option performance targets, I'll buy a second one for myself, and a third one for my wife, if she's interested.

So far I'm up 50%. Stay tuned.

-- updated 5/16/2013 -- Just an update for the record, in case someone comes across this thread. I sold half my shares earlier this week at $94, realizing a 3x gain. Looking to come back in when the stock settles down to about $80. I now have enough to buy one low-end Model S. Hopefully in five years, I'll have realized the 10x I'm planning on.

 

[gg_got_a_tesla]

More than for myself, as Cattledog said, I'm actually very happy for the rank and file Tesla employees who are definitely getting rewarded now for their brilliance and hard work after years of ploughing through all the adversity and uncertainty.

Elon did confirm in an interview sometime ago (in the context of whether the factory workers are unionized or not, I think) that, although Tesla is not a great paymaster in terms of salary and bonuses by Bay Area standards, the company offers every employee generous stock options. Given all the competition for good talent out here - particularly on the software side - it's good to see that there are more tangible rewards for these employees beyond achieving the vehicle electrification ideal.

That said, not sure how many employees (beyond the execs and senior management/engineers) would actually buy the Model S even if they could afford it now. I've always had a personal aversion to eating my own dog food... er... using the software that I create (coz' I know its entrails)

 

[jak]

I'm a first-time poster here. Normally, it's unthinkable for me to spend 100K for a car, but I read about the Model S, researched the company, test drove it and decided this is the car to replace my 18 year-old car. Over the years, I've saved up money to purchase a new car, but I couldn't find one that I really wanted: a high-tech, good-looking, good-performance, and quiet car. I think the Model S exceeded that. But even after all the saving, I still didn't have enough to purchase an S85 or P85, so I decided I'd put all of it into 2000 TSLA @ 35 last month hoping that by that same time next year, it will get to least 63 and I'll have enough to pay for a P85 (not including the credits, but including sales tax, long-term cap gains, etc). Hopefully, by then they'll also have more options, more colors, etc.... which probably means more $$$ for those new options. Since no one can accurately predict a stock price, I'll cross my fingers. In the meantime, I'll continue reading the forums.

 

[mlemke]

42 is the answer

YES!! Another fan!

 

[ToddRLockwood]

I'd be interested to know what percentage of Tesla owners are also TLSA stockholders.

 

[BondVillain]

It looks like it's working the other way around. Most of the stock movement happened after the most recent earnings report stated that the company was now profitable. That could only happen if people were buying the cars first.

 

[CapitalistOppressor]

I'm with Bonnie on this one. I doubt that many stock holders are buying a Model S directly as a result of the appreciation of the stock. Those who are, are doing so because of the halo effect who are seeing "success" and are becoming educated about the product as a result.

For my part, I got interested in the car in May and June of last year as I realized that the Model S was actually going to be a real thing. My research and growing passion for the car led me to think about investing in Tesla in July, and I didn't start playing for all of the marbles until around the time of the secondary in late September.

I just can't imagine that many folks have put in big investments into Tesla, without first being extremely passionate about the car itself. I would guess that most folks who have made a lot of money on the stock did so because they looked past conventional wisdom enough to be enthralled by the product itself (for whatever reason). We've sat here and derided the John Peterson's of the world, but the fact is that a John Peterson style analysis would be right 999 times out of a 1000 (well, absent the lying and obfuscation that really defines his actual arguments).

It took a lot of true believers to keep the stock propped up against such credible doubts. I rather suspect that the stock moving down would generate more sales than the stock moving up would, as folks would want to rush to the defense of the company they love.

 

[jak]

I'm a first-time poster here.

A 100K car is generally unfathomable for me. But after a few years of looking, I think the Model S is what I've been looking for. Researched it, test drove it, and see all the fans here spreading Model S goodness to the community. I didn't quite have the money for a P85, so last month, I decided to purchase 2000 TSLA @ 36 and hold it for the year and hope it'll reach about 63 by March of next year. Or maybe over 63 if there are many more nice options to come.

If not, I could always wait a little longer and if my 18-year old car breaks down, there's always Leaf, Volt, etc....

 

[vfx]

...
It took a lot of true believers to keep the stock propped up against such credible doubts. I rather suspect that the stock moving down would generate more sales than the stock moving up would, as folks would want to rush to the defense of the company they love.

To your 999 out of 1000 point, what other stocks fit the above emotional profile?

I'm gonna assume Apple but I don't know.

 

[Cattledog]

I agree that there is probably a really high correlation between car owner/stock owner with Tesla. I also think the norm is some TSLA gains are aiding some purchases, not underwriting entire ones - with a few exceptions. I brought up the topic because someone I met recently said they'd get their Model S when the price doubled - I think it was hovering around 35 then, so at 70. I've been debating jinxing all of us TSLA holders and e-mailing him at 60 and asking if he'd picked his color yet!

 

[bonnie]

Those who are, are doing so because of the halo effect who are seeing "success" and are becoming educated about the product as a result.

For those of you who are only buying if the stock appreciates, is it only if TSLA appreciates? Or is it if the overall value of your portfolio hits a certain mark? What if TSLA went up, but another of your holdings went way down? Would you still buy a Model S?

While I'm enjoying the TSLA ride , my decision points are more based on overall value of my portfolio, not the performance of an individual stock.