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Long-Term Fundamentals of Tesla Motors (TSLA)
- Thread starter Robert.Boston
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- elon is an ass investing TSLA
Actually Elon said that his money would be the last out with regard to Tesla. (see link, Elon Musk: )
He's going to need money from somewhere else to get to Mars.
I think there's a few different "bottom" prices to consider.
1. Realistic possible bottom price if Tesla continues to do well (ie., demand high) and economy doesn't go into recession.
2. Realistic possible bottom price if Tesla continues to do well but economy goes into recession.
3. Realistic possible bottom price if demand for Model S/X doesn't grow as expected and economy doesn't go into recession.
4. Realistic possible bottom price if demand for Model S/X doesn't grow as expected and economy goes into recession.
And then all of this will change after Q2 earnings results as well.
But for now, here's how I personally view these scenarios at this current moment (pre-Q2 earnings). Again all this will change after Q2 earnings, probably. Also note: realistic possible bottom price is different theoretical. Theoretically it can go to zero, but realistic bottom assumes not all the worst-case possibilities that a theoretic bottom price would)
1. Realistic possible bottom price if Tesla continues to do well (ie., demand high) and economy doesn't go into recession.
I'd say $110 since it was recently tested and passed the test.
2. Realistic possible bottom price if Tesla continues to do well but economy goes into recession.
$90.
3. Realistic possible bottom price if demand for Model S/X doesn't grow as expected and economy doesn't go into recession.
$90
4. Realistic possible bottom price if demand for Model S/X doesn't grow as expected and economy goes into recession.
$75
This is for the current moment but as the stock price increases and new information is released (ie., Q2 earnings), then these numbers will likely increase.
For now, the economy looks like it's in decent shape and Tesla is doing well, so probably only scenario #1 really matters right now.
If SpaceX develops rapidly reusable rockets that is an even bigger profit margin and even bigger lead on competitors than anything Tesla has. SpaceX is the better investment if we could actually buy into it. That being said while I'm sure he is not selling before Gen III hits the mainstream since there is no possible way to actually be the last one out unless the company goes bankrupt I'm pretty sure he was only speaking about the next 5-10 years in that quote.Actually Elon said that his money would be the last out with regard to Tesla. (see link, Elon Musk: )
He's going to need money from somewhere else to get to Mars.
JRP3
Hyperactive Member
Although since it only takes 90 seconds to do a full swap, therefore potentially 45 seconds to do a new install, there might be a good reason to build a bunch of cars even if they don't yet have enough batteries. However I don't think they are battery constrained yet. I assume they are running both shifts at about the same level and continuing to speed up the lines as they feel comfortable.
Since Elon owns 35 % of the shares, shouldn't the stock going up strengthen Tesla's financials, and by definition the stock. Elon's net worth keeps increasing, and he has made it clear he intends to invest the majority of his fortune in Tesla, Space X, and Solar City. Every time Tesla doubles Elon receives tons of stock via options. Eventually he will own 50 % of the float, and he has made it clear he won't sell.
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Elon owns approximately 27% of the company and can get an additional 5m shares in a CEO incentive plan (with 10 milestones). It will be difficult for him to ever own more than 31% of the company.
You should check out their definitive proxy statement. It has a lot of good info:
Tesla Motors - Definitive Proxy Statement
I know this has been posted before but i wanted to refresh this topic:
Tesal could be free of the convertible bonds as early as this year's end: Tesla Motors - Current Report
Conversion price should be around $161.88. Conversion may take place only after sept 30th (and at least 20 consecutive trading days). If things go our way shares will be trading significantly above that conversion price after Q3. This would safe Tesla Motors millions in interest and therefore add to overall profitability.
Tesal could be free of the convertible bonds as early as this year's end: Tesla Motors - Current Report
Conversion price should be around $161.88. Conversion may take place only after sept 30th (and at least 20 consecutive trading days). If things go our way shares will be trading significantly above that conversion price after Q3. This would safe Tesla Motors millions in interest and therefore add to overall profitability.
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Hi maekuz, what page in this doc that you linked to has the info about the $161.88 sept 30th info?
The interesting thing is not the first date they could be exercised, but the last. Why would anyone exercise early? (Unless there are dividends, which are still some years down the road).
I am sorry, I posted the wrong link. I edited my post and inserted the correct link: Tesla Motors - Current Report
The document states a conversion price of $124.52 and a strike price of 130% of that.
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You would get a ~32% return @ $164.88
The initial conversion rate of the Notes is 8.0306 shares of Common Stock per $1,000 principal amount of Notes (which is equivalent to an initial conversion price of approximately $124.52 per share). The conversion rate will be subject to adjustment upon the occurrence of certain specified events but will not be adjusted for accrued and unpaid interest. In addition, upon the occurrence of a “make-whole fundamental change” (as defined in the Note Indenture), the Company will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its Notes in connection with such make-whole fundamental change.
Prior to the close of business on the business day immediately preceding March 1, 2018, the Notes will be convertible only under the following circumstances: (1) during any calendar quarter commencing after September 30, 2013 (and only during such calendar quarter), if the last reported sale price of the Common Stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of Notes for each trading day of such period was less than 98% of the product of the last reported sale price of Common Stock and the conversion rate on each such trading day; or (3) upon the occurrence of specified corporate events. On or after March 1, 2018 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their Notes at any time. Upon conversion, the Notes will be settled in cash and shares of Common Stock (subject to the Company’s right to pay cash in lieu of all or any portion of such shares).
I think its p. 3 and 4.
Prior to the close of business on the business day immediately preceding March 1, 2018, the Notes will be convertible only under the following circumstances: (1) during any calendar quarter commencing after September 30, 2013 (and only during such calendar quarter), if the last reported sale price of the Common Stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of Notes for each trading day of such period was less than 98% of the product of the last reported sale price of Common Stock and the conversion rate on each such trading day; or (3) upon the occurrence of specified corporate events. On or after March 1, 2018 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their Notes at any time. Upon conversion, the Notes will be settled in cash and shares of Common Stock (subject to the Company’s right to pay cash in lieu of all or any portion of such shares).
I think its p. 3 and 4.
Citizen-T
Active Member
So, everyone is groaning about the TSLA's valuation being too high. Honestly, I can't blame them. At this point it escapes any kind of reasonable fundamental analysis. That doesn't mean it can't go higher, of course it can. We just can't make the numbers work out to justify the stock price. Even looking pretty far forward into the future and allowing for really good margins the math just doesn't work. BUT, the one thing that I never see in anyone's analysis is revenue from supplying drivetrains to other manufacturers.
DB just laid out for us not too long ago how far behind the other big auto makers are when it comes to EV technology. It'll take a huge investment of capital and time to reproduce what Tesla has achieved with the Model S platform. Tesla has taken the first big steps to demonstrating that a market for these cars exist and has built THE electric car brand. I have a feeling that given a few more quarters of proven demand, there should be at least one big auto that steps up and says, "I want a 'Tesla Inside' branded car on my lots."
Imagine what would happen to valuation calculations if tomorrow Toyota said, "We've entered into an agreement with Tesla to build the next generation of trucks on a Tesla designed/supplied power train." Or what if Subaru wanted that Model X style AWD system. It wasn't too long ago that many people believed that the only way Tesla was going to survive was by supplying drivetrains and battery packs to other manufacturers. But, for some reason that revenue stream has completely dropped of the radar.
I think the chances of seeing "Tesla Inside" models has only increased in the last several quarters. If I look at 2017 and see not just GenIII, but also at least one big power train client...the valuation doesn't look bad at all. In fact, it looks cheap.
DB just laid out for us not too long ago how far behind the other big auto makers are when it comes to EV technology. It'll take a huge investment of capital and time to reproduce what Tesla has achieved with the Model S platform. Tesla has taken the first big steps to demonstrating that a market for these cars exist and has built THE electric car brand. I have a feeling that given a few more quarters of proven demand, there should be at least one big auto that steps up and says, "I want a 'Tesla Inside' branded car on my lots."
Imagine what would happen to valuation calculations if tomorrow Toyota said, "We've entered into an agreement with Tesla to build the next generation of trucks on a Tesla designed/supplied power train." Or what if Subaru wanted that Model X style AWD system. It wasn't too long ago that many people believed that the only way Tesla was going to survive was by supplying drivetrains and battery packs to other manufacturers. But, for some reason that revenue stream has completely dropped of the radar.
I think the chances of seeing "Tesla Inside" models has only increased in the last several quarters. If I look at 2017 and see not just GenIII, but also at least one big power train client...the valuation doesn't look bad at all. In fact, it looks cheap.
Elon confirmed demand for the Model S in North America is currently 20,000 annually. (This could eventually increase to 40,000?)
Demand for the Model S in Europe will likely ultimately be at least 20,000. (This could eventually be 40,000?)
Demand for the Model S in Asia will likely ultimately be at least 20,000. (This could eventually be 40,000?)
Elon has stated initial demand for the Model X is 30 percent higher than initial demand for the Model S. (Global demand = 78,000 - 156,000?)
There are currently 0 analysts expecting anywhere near this kind of demand. Any bets on when analysts will begin revising estimates?
Demand for the Model S in Europe will likely ultimately be at least 20,000. (This could eventually be 40,000?)
Demand for the Model S in Asia will likely ultimately be at least 20,000. (This could eventually be 40,000?)
Elon has stated initial demand for the Model X is 30 percent higher than initial demand for the Model S. (Global demand = 78,000 - 156,000?)
There are currently 0 analysts expecting anywhere near this kind of demand. Any bets on when analysts will begin revising estimates?
Once again I totally agree. This might be one of those things that might sneak up on people. Toyota is in the midst of reinventing itself so this could really be in the cards. I have a strong feeling what is going on at Tesla right now is there are Toyota manufacturing engineers on site helping Tesla with operations and streamlining things. Toyota has a reputation of working directly with its suppliers to improve processes and efficiency, and then increasing its stake in them when they are comfortable. Right now though, what's more realistic is another joint venture on a sports car or the next iteration of Camry.
Personally, I'd love to see something like a sports car with the Tesla platform and handling characteristics of a BR-Z/FR-S/S2000. This would be an absolute killer in the market, but cost prohibitive at the moment.
Tesla has a market cap of around 17.5B. Porsche has a market cap of like 21B.
That alone makes me comfortable investing in Tesla. Porsche only sold 30,000 vehicles, across all models in the US last year. If the battery cell constraints can be figured out, I really believe Tesla can absolutely explode, and there is still plenty of room in the stock price for growth. I've underestimated TSLA every step of the way(and missed out), and I just can't bring myself to pull anything out yet.
I talk to people who would never spend more than 12k on a car, and they are trying to figure out how to save up (and incur large amounts of debt :frown to get a Tesla. The product is killer, and I think Elon will surprise us.
That alone makes me comfortable investing in Tesla. Porsche only sold 30,000 vehicles, across all models in the US last year. If the battery cell constraints can be figured out, I really believe Tesla can absolutely explode, and there is still plenty of room in the stock price for growth. I've underestimated TSLA every step of the way(and missed out), and I just can't bring myself to pull anything out yet.
I talk to people who would never spend more than 12k on a car, and they are trying to figure out how to save up (and incur large amounts of debt :frown
to get a Tesla. The product is killer, and I think Elon will surprise us.
Norse
Active Member
here's some figures that should put the potential of the company into some perspective and why I believe that this is a strong play in a disruptive technology.
Assuming that the July Model S deliveries are ~1800 units that is about the same as the COMBINED sales of the A8, BMW 7 series and Mercedes S Class. I think this is a valid comparison given the price as well as the size of the cars. I know alot more people would be interested in a Tesla that was more the size of the 5 series and had a starting price of $50k (the actual starting price of the 528i).
Audi US July Sales
A8: 452 units
A7: 645 units
A6: 2061 units
BMW US June (not July, can't find them) Sales
7 Series: 855 units
5 Series: 4484 units
Mercedes US July Sales
S Class: 577 units
E Class: 5,605 units
Assuming that the July Model S deliveries are ~1800 units that is about the same as the COMBINED sales of the A8, BMW 7 series and Mercedes S Class. I think this is a valid comparison given the price as well as the size of the cars. I know alot more people would be interested in a Tesla that was more the size of the 5 series and had a starting price of $50k (the actual starting price of the 528i).
Audi US July Sales
A8: 452 units
A7: 645 units
A6: 2061 units
BMW US June (not July, can't find them) Sales
7 Series: 855 units
5 Series: 4484 units
Mercedes US July Sales
S Class: 577 units
E Class: 5,605 units
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