I am a huge fan of the Tesla story — brash entrepreneur starts electric car company.
The story is four fold:
1. Car — great car
2. Elon Musk — irrepressible entrepreneur
3. Disruption of, perhaps, the most well-organized and entrenched industry
4. The stock, TSLA
Today, we talk about the stock. You will recall some time ago Elon Musk got in trouble for whispering he had backing to take the company private at $420/share. Several million dollars later, a few US Securities and Exchange Commission scoldings, a bit of public humiliation, the story came to be — well maybe Elon Musk didn’t have the requisite backing.
Elon Musk relaxing with some weed during Joe Rogan interview. Does this bother you?
Bad juju, but a busy entrepreneur has to relax, you say. Indeed.
Back to the stock, Big Red Car
Still, the stock powered along, until it didn’t.
Stock slips a bit over the last year falling below the $200/share perceived support level. Bad deal.
Some smart folks see if slipping further.
Truth — which is indeed stranger than friction, oops, meant fiction, forgive me — is that TSLA has been a wild ride — good to great in the 2013 time frame — over the last ten years. This is what it looks like.
If you had been in at the 29 June 2010 IPO price of $17/share you probably have a smile on your face. Recently Morgan Stanley indicated you might get a “worst case scenario” chance to buy TSLA at $10/share. Morgan Stanley, amongst others, focuses on concerns in the following areas:
1. Can the company self-fund its growth? TSLA recently closed a $2.7 Billion equity and convertible debt financing after saying for some time it would not need to access the capital markets.
At best, this buys Tesla another year. No more. One year.
2. Is the fundamental demand there for Tesla products? In the face of new competition from Jaguar and Volkswagen? [Taking a hard look at both Jaguar and Volkswagen offerings, your Big Red Car concludes that Tesla’s battery, drive train efficiency is vastly superior.]
3. If the company cannot self-fund its growth can it access the capital markets on a reasonable basis?
4. Is the market for electric vehicles saturated? Will the increased competition further the level of saturation?
5. Was the Solar City acquisition — folded another Elon Musk company and its debt into Tesla, smelled like limburger to your Big Red Car — a bust? Two years in, the deal looks like a rented mule on its last legs.
The solar shingle roof business? Two year head fake. Nothing happening.
6. Will Tesla get caught up in the US-China tariff kerfuffle? Odds are the answer is YES! Let me revise that — Hell yes.
7. Is the bloom off the Tesla story? The TSLA story?
As of 5-21-2019, amongst analysts that followed TSLA (per Bloomberg) there were 11 BUY recommendations, 10 HOLD recommendations, and 15 SELL recommendations. That was two days ago.
The Big Mo has left the building!
8. Perhaps the greatest risk to TSLA is its mercurial and volatile genius — Elon Musk. Can he continue to pull rabbits from hats? Will the weed smoking, the US SEC skirmishing, the self-dealing, the never met public predictions sink him? Does TSLA survive a parting of the ways? I think not.
Can he maintain focus on the TSLA story in the face of Solar City, SpaceX, the Boring Company and DeepMind, Everdream, Mahalo/Inside, Hyperloop TT, OneRiot, Stripe, Vicccarious, NeuroVigil, X.com/PayPal, Game Trust, zip2 and Halcyon Molecular?
These interests/investments span software, apps, Ecommerce, aerospace, transport, energy, artificial intelligence, and medical/biotech. Big portfolio of ideas, interests, investments. Too big?
Musk, the Man, the Myth
In discussing Elon Musk from a holistic perspective, it is necessary — truly, Big Red Car, or is this some creepy voyeuristic nonsense? — to touch on his mating and dating practices. Not really any business of a Big Red Car, mind you, but if we are to touch on the risk factors this has some bearing. You be the judge.
1. Elon Musk marries first wife Justine in 2000. They met in college and have six children (no, not in college the six kids, after they get married, sheesh). One died tragically of SIDS. No parent should ever have to bury a child. This is a burden beyond belief.
They had twin boys and triplets. Marriage ended in 2008.
2. Elon Musk dates and marries Talulah Riley, actress, in 2010. This lasts two years and ends in divorce. Actresses — a theme, a meme.
3. Elon Musk is linked with a number of high profile women including Cameron Diaz who in 2013 bought a Tesla and got a test drive with Elon. The ride went nowhere and he denies the liaison, but there are pictures.
4. Talulah Riley re-enlists in 2013 when Elon Musk and her remarry. They live together with all five of Musk’s children until they divorce in 2016.
5. In 2016, Elon Musk and Amber Heard, Johnny Depp’s ex, link up and breakup in 2018. Elon Musk says she broke his heart.
6. Canadian songstress Grimes (Claire Elise Boucher) puts the pieces — uhh, broken heart pieces — back together again in 2018. Here they are at The Met Gala.
Bottom line it, Big Red Car, Tesla? TSLA?
So, there you have it, dear reader. Can TSLA fight its way back to the top of the heap? In a word, NO. Sorry.
Second opinion? Hell, NO!
But, hey, what the Hell do I really know anyway? I’m just a Big Red Car. Be good to yourself.