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Three years ago, the hope was to get 20k/year demand for Model S, Superchargers hadn't been conceived of, and no one had ever heard the word "gigafactory" before. One could argue that the basic plans haven't changed since the Secret Tesla Master plan was unveiled in 2006.
No one can predict the future and it's your money, I just wanted to let newer members know that this "overvalued" and "priced to perfection" stuff has been repeated over and over by bears for more than a year while TSLA continues to gain value.
Does anyone know why Tesla is also traded on the Frankfurt stock exchange? Might this be intentional, to allow Volkwagen or BMW to secretly acquire a big position in Tesla without having to disclose it?
http://www.hengeler.com/fileadmin/medien/broschueren/New_German_disclosure_requirements_for_signficant_shareholdings.pdf
http://www.hengeler.com/fileadmin/medien/broschueren/New_German_disclosure_requirements_for_signficant_shareholdings.pdf
I strongly disagree with your POV, but it takes both sides to make a market. I think the market hasn't fully priced in how good the Model X is and the surge in demand once it's released. I don't think the implications of the Gigafactory are at all understood, not only in improving Tesla's gross margin but also in opening a whole new business in stationary storage. The market isn't expecting perfect execution, or there would have been a much bigger hit when the factory shut-down took twice as long as planned.
No, I'm happily going to sit on my shares and LEAPS for a good while.
Three years ago, superchargers had not only been conceived; they were a crucial part of the business plan. Tesla have been having a consistent and more or less unchanging business plan for the last years, and cudos to them for that.
The point is: The business plan is now fully discounted into the stock price. The market expects them to succeed, big time. I am not saing that this expectation is wrong, or that the stock is overvalued. I'm just saying that I think the stock is now fairly priced, and will no longer outperform the market.
Tesla has a "dual listing" on the Frankfurt exchange. That means its primary listing is NASDAQ but it also can be traded on FRA. As I understand it, the dual listing status doesn't change that the primary regulatory oversight and requirements remains solely with NASDAQ and the US SEC.
Here's the bit about dual listing from the FRA exchange website:
The Supercharger unveiling was in September 2012. Maybe Elon and JB had conceived of it prior to that but investors were not aware of it. I bought my first shares almost exactly three years ago in November 2011 ($21!) and trust me that even the most bullish investors back then would have been pleasantly surprised to be where we are now.
The Blue Owl
Endangerous Herbivore
Who knows, you may be right, but I'm betting the other way.
Yes, maybe the superchargers were part of the plan, but the market didn't understand it then, and didn't believe they could pull it off.
I think the same is true today about the GF. I see a lot of "they won't have the required capital to build it", "the demand won't be there", "battery technology will change under their feet", "they won't achieve 30% cost reduction", "competition will intensify and eat into their profits", etc, etc. This skepticism is also priced into the stock. All perfectly reasonable statements on the surface, in the sense that there is no guarantee that any of those won't happen, but I think it's more likely that they will build it, it will lead to >30% cost reduction, the competition will still be playing catch up, and the demand will be much greater than today. In the meantime, Model X will blow everyone else out of the water.
And I am betting that all that will reflect in their stock price, which will be "much higher than it is today", in the words of a guy I saw on TV.
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mejojo
Active Member
Curious if this is a realization you've just come to? Monday/Tuesday would have been a great time to get out above 255.
pz1975
Active Member
There is no way that all of their plans are now fully priced in. The market does not work in absolutes. There is always some % of investors out there who doubt TSLA and those that believe in them and everyone in between. This is why the stock price goes up and down. To argue that the stock won't go above $255 because everything is priced now is ridiculous or just typical bearish FUD on a down day.
Correct. However, Daimler , Volkswagen, and BMW are only traded in Germany., and Volkswagen just announced it will invest 100 billion over the next 5 years in alternative fuel vehicles. Would Volkswagen need to disclose owning exposure to $20 Billion in a "foreign company also listed in Germany" via stock, options, or a significant partnership. I have a hard time believing Volkswagen would commit to investing $100 Billion in any "alternative fuel vehicles" they are currently selling without a high level of certainly the technology was proven to be safe, work perfectly, and demand existed for it. Tesla currenty meets all three requirements.
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I sure as hell hope so, and I hope it goes the same way it went last time somebody tried this in the automotive space.
(But it wont)
Yup, it would, but nobody hit my sell order placed a bit above trading levels those days. So I lowered it a notch, but only a notch, since we're not giving it away, are we? :wink:
The Blue Owl
Endangerous Herbivore
The particular somebody who pulled that stunt is the former CEO of Porsche, Wendelin Wiedeking. For those who are curious, this is an article telling that story. Worth a read.
But yeah, it won't happen here.
Edited: my original post incorrectly identified the architect of the famous VW short squeeze. Corrected.
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OK guys lets take a break from manipulation talk. A good Q4 report will move the stock. Execution will help that greatly:
This is the P85D delivery thread:
Tracking P85D delivery thread - Page 61
Production is starting.
This is the P85D delivery thread:
Tracking P85D delivery thread - Page 61
Production is starting.
Great! I bet the P85D delivery and performance review (magazine, youtube etc.) will boost a "medium" rally in December and January. At the end, only the TM's execution matters. I do hope we see at least one quarter BEAT in Q4, otherwise the 2014 is really "disappointing" (Q1: meet; Q2: meet; Q3: miss).
There are definitely catalysts in the future that I don't believe are priced in. Tesla's prioritization of D's over regulars is further incentive for people to upgrade their order to a D. They pay a bit more but get a better car, and receive it sooner. Clever.
Closed at 242.78, and still 242ish in the aftermarket. Aargh. The stock is hoplelessly unpredictable now; I will just unload on Monday whatever the price (original entry 40 - 60). If I miss a great rally, so be it. I really see some alternative investsments.
(Edit: A sh!tty opening Monday, and I'll be pissed and hold). :biggrin:
(Edit: A sh!tty opening Monday, and I'll be pissed and hold). :biggrin:
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Perfectlogic
Member
The priced to perfection talk is rubbish, lets look at the numbers for 2019/2020 when Elon expects a runrate of 500k/y. Say 150k of those sales are S/X at an average sales price of 110k (the X will be more expensive, dual motor option and inflation should easily push the ASP up this far), that is $16.5B in revenues, lets give those vehicles a 33% margin, I actually think they can do a bit better given the fast improvements in margin and the scale of their business in 2020, but that would be $5.45B in gross profits. Say the 350k Model 3 will have an ASP of $50k (inflation and options should make this reasonable, the S starts at is it $70k? And the ASP is 50% higher), that is $17.5B in revenues, with shall we say a 25% margin which I also think is lowballin it, I believe even the industry average is around this number or slightly higher (for a lower ASP) if you discount R&D which is how Tesla reports their numbers. That would be $4.38B in gross profits for the Model 3s, a total of $34B in revenue and $9.8B in gross profit for 2020. Regarding net profit I think a 10% margin would be reasonable, the industry average is around 5%, but a higher gross margin is likely given a much higher ASP, Tesla's vertically integrated business model should also help and probably a much lower than average ad budget too..
The 10% net margin would give Tesla a profit of $3.4B in 2020. At this point they will still be able to grow at a fast rate given they are competetive (which I certainly believe) as their market share will still be a mere .5% of total car sales, the big guys have a 10% market share. They will probably also have low debt, they only have a bit more than $2B right now, net of cash they don't owe anything but they will use the money for the giga factory ofcourse. Their cash flow will improve significantly over the coming years which I believe will allow them to build out their infrastructure without further loans, perhaps a few billion more for the second gigafactory starting late 2017 or early 2018, but a total of $4B in loans is peanuts even compared to their current $30B market cap, as comparison Toyota owes 53% of their market cap net of cash and short term investments and Volkswagen Group owes a whopping 95% of their market cap net of short term investments and cash. With those things in mind I would argue a 30 P/E would be reasonable for Tesla in 2020 on the $3.4B in net profits giving them a market cap of $102B, which would give you a huge return of 240% if you invested today. Other car companies are valued at around a P/E of 10, but as I said they are ridden with debt and see marginal to no growth.
Another thing I didn't even mention is their battery storage business which I think is very like to be huge as we transition to renewables, Tesla themselves expect to sell a third of the capacity from the giga factory to other car manufacturers and storage. How much this part should add to their market cap is a bit harder to figure out as it pretty much is a new market, I would guess $20B+ in 2020.
The 10% net margin would give Tesla a profit of $3.4B in 2020. At this point they will still be able to grow at a fast rate given they are competetive (which I certainly believe) as their market share will still be a mere .5% of total car sales, the big guys have a 10% market share. They will probably also have low debt, they only have a bit more than $2B right now, net of cash they don't owe anything but they will use the money for the giga factory ofcourse. Their cash flow will improve significantly over the coming years which I believe will allow them to build out their infrastructure without further loans, perhaps a few billion more for the second gigafactory starting late 2017 or early 2018, but a total of $4B in loans is peanuts even compared to their current $30B market cap, as comparison Toyota owes 53% of their market cap net of cash and short term investments and Volkswagen Group owes a whopping 95% of their market cap net of short term investments and cash. With those things in mind I would argue a 30 P/E would be reasonable for Tesla in 2020 on the $3.4B in net profits giving them a market cap of $102B, which would give you a huge return of 240% if you invested today. Other car companies are valued at around a P/E of 10, but as I said they are ridden with debt and see marginal to no growth.
Another thing I didn't even mention is their battery storage business which I think is very like to be huge as we transition to renewables, Tesla themselves expect to sell a third of the capacity from the giga factory to other car manufacturers and storage. How much this part should add to their market cap is a bit harder to figure out as it pretty much is a new market, I would guess $20B+ in 2020.
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