# Now...this has me a little scared. Elons letter sounds like shorts.



## Garlan Garner (May 24, 2016)

Elon sent out an email to the company today: Elon Musk calls for Tesla to focus on profits and affordability - Electrek

What does Elon mean when he says "When looking at our actual profitability, it is very low at around 1% for the past year. "

Is the following statement really true?

"Tesla has achieved profits in the last five quarters in a row, but the profits have been marginal and often dependent on regulatory credits. "

This stuff sounds like what the short sellers say. Is Elon hinting at something? Is there any reason to fear that things are worse than what they seem?

I am 100% invested in Tesla. How is this not affecting the stocks? I don't get it.


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## Garlan Garner (May 24, 2016)

I mean.....what?

Elon Musk: Tesla (TSLA) is open to merging with automakers - Electrek

What is he doing?

Is something wrong at Tesla?


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## iChris93 (Feb 3, 2017)

Garlan Garner said:


> I mean.....what?
> 
> Elon Musk: Tesla (TSLA) is open to merging with automakers - Electrek
> 
> ...


From the "article" 


> Today, CEO Elon Musk received an Axel Springer Award in Germany, and during an interview with CEO Mathias Döpfner, he was asked if it was a serious option to buy an existing automaker.
> 
> Musk answered:
> 
> We are definitely not going to launch a hostile takeover, but if somebody said it would be a good idea to merge with Tesla, we would have this conversation.​


This statement isn't concerning to me. It seems more like Elon would consider Tesla absorbing another automaker.


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## Garlan Garner (May 24, 2016)

garsh said:


> Step back from being a Tesla fan, and realize that this is a Really Good Thing™.
> 
> Another car company is planning on making a very compelling electric car! It's not a compliance car, or a weirdmobile. And heck, they even bestowed the company's* most iconic name* on the vehicle, which shows how serious they are about it.
> 
> I can't wait for Tesla to get some real competition.


They may buy up all of the competition.

Elon Musk: Tesla (TSLA) is open to merging with automakers - Electrek

Its getting scary now.


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## iChris93 (Feb 3, 2017)

Garlan Garner said:


> Its getting scary now.


What exactly is scary about Elon saying they would consider buying another automaker?


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## Garlan Garner (May 24, 2016)

iChris93 said:


> What exactly is scary about Elon saying they would consider buying another automaker?


None of the statements he made today are scary "alone", however when I read all of the statements together its a little scary to me.

1. We are only making profits from credit sales from other companies. (letter to employees today)
2. We are willing to have a conversation about merging with other companies. (comment at awards ceremony today)

My question is: When looking at all of his most recent comments together..... Is there a financial issue at Tesla?

Historically it has always been prudent/necessary to find self imposed hidden meaning's behind what Elon actually says/riddles to understand what he's trying to communicate.


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## GDN (Oct 30, 2017)

iChris93 said:


> What exactly is scary about Elon saying they would consider buying another automaker?


I saw read the article earlier, I don't think it would be scary, but if he didn't do it right I think it would be like Perot running for President. He could maybe do a good job but the red tape won't allow anyone to do it quite right. I figure most legacy automakers have so many old school road blocks it isn't worth his time.

I truly don't see how the second richest man in the world with the vision and drive that has got him where he is can't do this on his own, he can and is scaling out fast. I think his biggest roadblock these days may literally be himself. He needs to put experts in control of manufacturing and service and let them do their thing. They have the engineering down it seems. He just has to improve the other two areas and I think he may be proving he can't do that, or maybe just hasn't had enough time in the last 9 months, but it is past time to focus on those two items.


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## Needsdecaf (Dec 27, 2018)

Garlan Garner said:


> Elon sent out an email to the company today: Elon Musk calls for Tesla to focus on profits and affordability - Electrek
> 
> Is the following statement really true?
> 
> ...


Yes, it's true. Just look at the investor relations section of their website. Here is the last 5 Quarters. Notice that in 4 of the 5 quarters, the GAAP Net Income is less than the revenue received as regulatory credits. In other words, if Tesla didn't have that income from other manufacturers, the last 4 quarters would not have shown a net profit, since there is negligible expense to obtain that income.


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## iChris93 (Feb 3, 2017)

Garlan Garner said:


> None of the statements he made today are scary "alone", however when I read all of the statements together its a little scary to me.
> 
> 1. We are only making profits from credit sales from other companies. (letter to employees today)


I guess I already knew this part so it wasn't surprising to me. Tesla is still growing, I hope they can become profitable without the credits.


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## JaBay (Mar 23, 2019)

He's setting up another buying opportunity. Wait for the dip.


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## slacker775 (May 30, 2018)

And he’s certainly indicating they wouldn’t be against the concept of acquiring an auto manufacturer, The upside for a Tesla would be gaining existing manufacturing facilities. The downside for Tesla would be obtaining manufacturing facilities that are designed for ICE production that have to be converted, a legacy workforce to deal with etc. so it would likely have to be a distressed company that has to sell out pretty cheap. They wouldn’t want to snag up a well run company at some crazy multiple when they can just build the facilities themselves. 

Make no mistake, acquisitions can be really great, yet they pretty much always are a massive headache


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## M3OC Rules (Nov 18, 2016)

Amazon went for a long time without making profits and pretty much own us now. Profits are not really Tesla's main concern right now. This is more to employees to try to keep them motivated in my opinion. Better margins also given them more money to invest. They have a big lead in electric vehicles but there is a lot of investment by the competitors. There is incredible room for Tesla to grow. There is no reason to start stockpiling money. They are trying to grow as fast as they can. Also given the stock is so high they can use it to make large purchases. They could use it to buy competitors that threaten them like Facebook does. Maybe they are a little fearful the stock will drop a lot if they turn unprofitable.


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## Bigriver (Jan 26, 2018)

Garlan Garner said:


> I am 100% invested in Tesla.


As in 0% holdings in anything else? That would indeed be a scary thing. I'm a Tesla enthusiast, TSLA share holder, and optimistic about the future, but diversity in investments is a good thing.


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## FRC (Aug 4, 2018)

Bigriver said:


> As in 0% holdings in anything else? That would indeed be a scary thing. I'm a Tesla enthusiast, TSLA share holder, and optimistic about the future, but diversity in investments is a good thing.


Yeah, 100% investment in anything is a great way to get rich...or go broke.


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## Garlan Garner (May 24, 2016)

Bigriver said:


> As in 0% holdings in anything else? That would indeed be a scary thing. I'm a Tesla enthusiast, TSLA share holder, and optimistic about the future, but diversity in investments is a good thing.


100% since June 2019. 1500% return so far.

Its been a great thing.

Diversity is good when you don't know what you are doing.


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## garsh (Apr 4, 2016)

Garlan Garner said:


> Diversity is good when you don't know what you are doing.


If that were true, then you wouldn't be scared by some random interviews and articles.


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## slacker775 (May 30, 2018)

Garlan Garner said:


> 100% since June 2019. 1500% return so far.
> 
> Its been a great thing.
> 
> Diversity is good when you don't know what you are doing.


I did just look at this with my oldest and your timeframe from of a June 2019 to now is about as big of a home run as you could ever hit. $1000 invested then would be around $14,000 today. Kudos on that. That said, I'm definitely keeping myself reasonably diversified. I doubt my heart can take the up and down from random Elon tweets!


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## Garlan Garner (May 24, 2016)

garsh said:


> If that were true, then you wouldn't be scared by some random interviews and articles.


Its the person who is being interviewed that "caused me to pause". Its the person who is volunteering information......

Its not like some "random yahoo" is being interviewed about their thoughts on Tesla. Its Tesla speaking.

Just like when Trevor Milton was speaking/interviewed about Nikola........ He was Nikola....and single handedly tanked his own company... oh well.....

There is no CEO as sharp-technically advanced-brilliant as Elon Musk.....so I listen.


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## Garlan Garner (May 24, 2016)

slacker775 said:


> I did just look at this with my oldest and your timeframe from of a June 2019 to now is about as big of a home run as you could ever hit. $1000 invested then would be around $14,000 today. Kudos on that. That said, I'm definitely keeping myself reasonably diversified. I doubt my heart can take the up and down from random Elon tweets!


I agree - There were many times I had my finger on the sell button as TSLA has been extremely volatile in the past few years. However I had to follow my rule.

Let the trailing stop orders do their job. Let them sell for you.


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## FRC (Aug 4, 2018)

Garlan Garner said:


> Diversity is good when you don't know what you are doing.


LOLOLOLOLOLOL


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## Garlan Garner (May 24, 2016)

FRC said:


> LOLOLOLOLOLOL


I forgot my LOL's at the end of that sentence.

Anywhoo.....I don't have to diversify for safety sake.....Trailing Stop Loss sell orders are my security. Fidelity provides me all of these free tools.


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## Garlan Garner (May 24, 2016)

FRC said:


> LOLOLOLOLOLOL


Serious question - Do you think Elon is diversified?


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## Bigriver (Jan 26, 2018)

Garlan Garner said:


> Serious question - Do you think Elon is diversified?


Yes. "He is the founder, CEO, CTO and chief designer of SpaceX; early investor, CEO and product architect of Tesla, Inc.; founder of The Boring Company; co-founder of Neuralink; and co-founder and initial co-chairman of OpenAI." (Wikipedia)


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## AutopilotFan (Oct 6, 2018)

Garlan Garner said:


> 100% since June 2019. 1500% return so far.
> 
> Its been a great thing.
> 
> Diversity is good when you don't know what you are doing.


Thinking you know what you are doing in the stock market is what _gamblers _do. *Investors *diversify.

Think of it this way -- now is a *wonderful *time for you to sell a bunch of Tesla and diversify. You may never get a better one; as companies like Tesla become mainstream, big gains become rarer. I'm looking at investing some of my Tesla gains in companies that supply the electric car ecosystem, which are likely to grow as the transportation system electrifies.


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## Garlan Garner (May 24, 2016)

AutopilotFan said:


> Thinking you know what you are doing in the stock market is what _gamblers _do. *Investors *diversify.
> 
> Think of it this way -- now is a *wonderful *time for you to sell a bunch of Tesla and diversify. You may never get a better one; as companies like Tesla become mainstream, big gains become rarer. I'm looking at investing some of my Tesla gains in companies that supply the electric car ecosystem, which are likely to grow as the transportation system electrifies.


Everyone has been telling me to diversify - since June 2019.

hmmmm

I'll think about it after December 21'st.


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## garsh (Apr 4, 2016)

Garlan Garner said:


> Its the person who is being interviewed that "caused me to pause". Its the person who is volunteering information......


But your interpretations of the statements into panic tells me that you're worried because you're too exposed to TSLA to think rationally.



Garlan Garner said:


> What does Elon mean when he says "When looking at our actual profitability, it is very low at around 1% for the past year. "


Actual profits is simply revenue - expenses. And he's correct - it's very low.
But if you actually "know what you are doing", then you realize that Tesla is shoveling a ton of money into building new factories as quickly as possible. That's why expenses are currently so high. And that's why the market isn't panicking. This is a company in growth mode. Expenses are simply going to remain high until they've finished growing. If they can remove cost from production, then they can afford to grow even more quickly.


Garlan Garner said:


> Elon Musk: Tesla (TSLA) is open to merging with automakers - Electrek
> What is he doing?
> Is something wrong at Tesla?


Did you actually watch the interview? Or at least read the article?
Mathias Döpfner asked him if he would consider BUYING another automaker. Elon said they would never perform a hostile takeover, but if a company wanted to be bought, he would consider it.

How do you interpret that as "something wrong at Tesla"?


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## Garlan Garner (May 24, 2016)

garsh said:


> But your interpretations of the statements into panic tells me that you're worried because you're too exposed to TSLA to think rationally.
> 
> Actual profits is simply revenue - expenses. And he's correct - it's very low.
> But if you actually "know what you are doing", then you realize that Tesla is shoveling a ton of money into building new factories as quickly as possible. That's why expenses are currently so high. And that's why the market isn't panicking. This is a company in growth mode. Expenses are simply going to remain high until they've finished growing. If they can remove cost from production, then they can afford to grow even more quickly.
> ...


I'm "asking".

I'm "asking" the forum if they think anything is wrong.

Sounds like nothing is wrong. I'm good.


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## M3OC Rules (Nov 18, 2016)

I watched the full interview and it is pretty clear that he was being asked a hypothetical and there isn't really a story there. The fact he said they would not perform a hostile takeover of auto manufacturers is interesting. I totally believe him. As others have pointed out what would they get? But what about other companies outside of the auto manufacturers. If you look at other companies of this value they tend to be pretty aggressive to maintain their position. Tesla does have powerful positions in terms of a proprietary charging network and battery supply. They also could have access to a huge percentage of peoples media/game time if they achieve FSD and Robotaxis. Maybe one day we're talking about anti-trust.


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## Garlan Garner (May 24, 2016)

garsh said:


> But your interpretations of the statements into panic tells me that you're worried because you're too exposed to TSLA to think rationally.
> 
> Actual profits is simply revenue - expenses. And he's correct - it's very low.
> But if you actually "know what you are doing", then you realize that Tesla is shoveling a ton of money into building new factories as quickly as possible. That's why expenses are currently so high.


The problem I had with the 1% profit statement was that "Elon" made the statement. He should understand that the reason they made only 1% was growth.....right? Wouldn't you think that if anyone on the planet understands Tesla's growth financials - it's Elon?

Why would Elon point the small 1% profit margins out if HE understands that growth is causing the low profit margins? That's the stuff short sellers gorge themselves on. Is he just trying to motivate the team? I just thought that was a strange statement by ELON - while at the same time making a statement about merging/acquisitions.

I'm good.


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## M3OC Rules (Nov 18, 2016)

Garlan Garner said:


> Anywhoo.....I don't have to diversify for safety sake.....Trailing Stop Loss sell orders are my security.


Can you explain this investing strategy? After you sell, what do you do with the money? Is your plan to ride Tesla to a peak and then get out?


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## Garlan Garner (May 24, 2016)

M3OC Rules said:


> Can you explain this investing strategy? After you sell, what do you do with the money? Is your plan to ride Tesla to a peak and then get out?


Its not really a strategy.

I purchased a boat load of Tesla shares ( north of 1000 ) in June 2019.

Then I put a 30% trailing stop loss order against it. The trailing stop loss order would automatically sell the stock if it ever went below 30% of its high price. Every time Tesla reached a new high...my sell price would automatically adjust higher and move with it.

That's it.

I watched it until it grew 30% ( 2 days after my purchase ) and then I was comfortable that the worst I could ever do is break even from that point forward. That way....I wouldn't have to look at it every day and be emotional about anything. Now I'm up over 1400%

Trailing stop loss orders and those tools are something I used to have to pay a broker to do for me. Now institutions like Fidelity give them to me for free.
If my order ever triggers and sells....then I have an automatic buy of some no-load funds which are safe.....until I choose to look at it again.


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## Garlan Garner (May 24, 2016)

I just ask questions when someone like Elon makes multiple statements at the same time. Its not just one statement. I didn't even bring up the fact that he is still saying that the stock price is too high. He said it yesterday - even after the 5 for 1 stock split a while ago. 

I know his statement isn't a statement of company valuation but a statement based on ( if its like the last time he said it...) the fact that it was too expensive for the lower end market folks to get at.

Oh well. its going down today...He should be happy. lol


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## FRC (Aug 4, 2018)

On August 31, 2020 TSLA hit a new high(at that time) of $498. Eight days later, on September 8th, TSLA fell to $330. This was a drop of 33+% from it's previous high, and yet your trailing stop loss did not sell. This is hardly the only time that TSLA has been extremely volatile. We're not getting the whole story here, What gives?


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## Garlan Garner (May 24, 2016)

FRC said:


> On August 31, 2020 TSLA hit a new high(at that time) of $498. Eight days later, on September 8th, TSLA fell to $330. This was a drop of 33+% from it's previous high, and yet your trailing stop loss did not sell. This is hardly the only time that TSLA has been extremely volatile. We're not getting the whole story here, What gives?


It did auto sell and it auto re-purchased on the open after my permission. Another tool of Tesla. Made 3% on that one. That has happened twice as a matter of fact ( auto sell-auto re-purchase).

My initial investment was June 2019.

Tesla is STILL volatile if you ask me. Right now its down 7% from yesterday. geesh Are investors following Elons request to bring the stock down? Are they selling off because of his statements? I have no idea.

My only point is this. I don't have a strategy. I'm not reccomending what I do. I'm just sharing what i do.

Say whatever you want. Do whatever you want.


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## iChris93 (Feb 3, 2017)

Garlan Garner said:


> I didn't even bring up the fact that he is still saying that the stock price is too high. He said it yesterday - even after the 5 for 1 stock split a while ago.
> 
> I know his statement isn't a statement of company valuation but a statement based on ( if its like the last time he said it...) the fact that it was too expensive for the lower end market folks to get at.


Most stocks are too high, IMO. They're defying gravity and will eventually correct, IMO.


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## Wooloomooloo (Oct 29, 2017)

Garlan Garner said:


> The problem I had with the 1% profit statement was that "Elon" made the statement. He should understand that the reason they made only 1% was growth.....right? Wouldn't you think that if anyone on the planet understands Tesla's growth financials - it's Elon?
> 
> Why would Elon point the small 1% profit margins out if HE understands that growth is causing the low profit margins? That's the stuff short sellers gorge themselves on. Is he just trying to motivate the team? I just thought that was a strange statement by ELON - while at the same time making a statement about merging/acquisitions.
> 
> I'm good.


Elon knows the stock is over-valued, but the problem is no one can have a reasoned conversation about this because many hardcore TSLA 'fans' (I'm not going to say investors) can't accommodate any reality into their decision. The fact that you have said you're 100% invested in TSLA but didn't know the reality of the margins is quite remarkable, but not at all unique.

Tesla could quite easily reach 10x this year's volumes in the next 5 years, and still not be 'worth' $500bn according to fundamentals. The bet is that Tesla will grow exponentially and have the kind of margins you see at Apple (18 - 25% on each unit) but that isn't happening. In fact it's not even happening if you remove capEx (which has plummeted in the last year compared to 2018). Another bet is on FSD and that this will create an endless revenue stream for Tesla, but absolutely no-one has articulated how this is going to happen, or considered the fact that Tesla will essentially be competing with its own customers (because apparently we're all going to make money from our cars as appreciating assets, right?)

I saw an Amazon comparison earlier in the thread. Amazon basically took over ALL retail across much of the globe and took a huge stake in cloud computing - one massive market with high valuation and a new market with no apparent ceiling. If you look at cars, the top 5 companies combined are not worth $500bn, the margins are simply not there. So even if Tesla becomes the larget car maker on the planet by volume, it isn't likely it will do that with margins of 25% (in fact it simply won't).

I own TSLA and a Tesla - I bought in at between $220 and $250 (and a handful when they dipped below $200 in 2019) and haven't traded since, but it's less than 10% of my portfolio (I'm in my late 40's so accumulated a few stocks over the years). You've been lucky, good on you, but don't confuse that with reasoned judgement. Many investors who jumped on board in 2019 did so because of FOMO - the demographic for in dividual investors in TSLA is primarily young, male, single, and living at home. When TSLA joins the S&P on Dec 21st, you will see a slow decline in price as fundamentals grow in relevance, and volatility is ironed out.

There's an old saying on the street, which is you can't take a profit until you sell.


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## garsh (Apr 4, 2016)

Garlan Garner said:


> Why would Elon point the small 1% profit margins out if HE understands that growth is causing the low profit margins?


This was a leaked email internal to Tesla. This was never meant to be seen by a wider audience. He is simply providing motivation for his employees to look harder at bringing production costs down further.


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## Garlan Garner (May 24, 2016)

Wooloomooloo said:


> Elon knows the stock is over-valued, but the problem is no one can have a reasoned conversation about this because many hardcore TSLA 'fans' (I'm not going to say investors) can't accommodate any reality into their decision. The fact that you have said you're 100% invested in TSLA but didn't know the reality of the margins is quite remarkable, but not at all unique.
> 
> Tesla could quite easily reach 10x this year's volumes in the next 5 years, and still not be 'worth' $500bn according to fundamentals. The bet is that Tesla will grow exponentially and have the kind of margins you see at Apple (18 - 25% on each unit) but that isn't happening. In fact it's not even happening if you remove capEx (which has plummeted in the last year compared to 2018). Another bet is on FSD and that this will create an endless revenue stream for Tesla, but absolutely no-one has articulated how this is going to happen, or considered the fact that Tesla will essentially be competing with its own customers (because apparently we're all going to make money from our cars as appreciating assets, right?)
> 
> ...


Interesting.

I purchased Tesla because no one else was doing what they were doing. I was nearing retirement and wanted to secure it. I disagree with you in that it was luck. It wasn't "pure" luck. There were other options.

I would sell all my Tesla except that I'm waiting on one more thing.......Robotaxi.

If I find what I call another market changer....or industry dissrupter..... I'm going all in. Can anyone say "starlink"? I'm researching them like a hawk. I'm watching customer reaction ( both good and bad ). Right now....starlink is extremely convenient but not a market dissrupter. If they IPO - I might split my Tesla between the both.


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## Garlan Garner (May 24, 2016)

garsh said:


> This was a leaked email internal to Tesla. This was never meant to be seen by a wider audience. He is simply providing motivation for his employees to look harder at bringing production costs down further.


Lets hope so.

He still shouldn't half-lie to them though.


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## garsh (Apr 4, 2016)

Garlan Garner said:


> He still shouldn't half-lie to them though.


He didn't.
What part of that email do you believe is a lie?


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## Garlan Garner (May 24, 2016)

garsh said:


> He didn't.
> What part of that email do you believe is a lie?


Its a half lie. Telsa could show all kinds of profit if they didn't spend it on growth.

Ok....we are getting into Gordon Johnson territory. lol

I believe Elon knows that even if they save money - they are only going to spend it on growth. There won't be any additional profits on the books outside of regulatory credits no matter what.
I believe if Tesla found 500 million laying on the ground - that they will only show credits on the books as profit. They are going to spend EVERYTHING on growth.

Don't get me wrong.....thats a fantastic thing, but..... they "made" more money in sales than just the profit they report. They just spent it all on growth....a growth that has no cap.

Its like if I told my kids.....We don't have enough food to eat because we just didn't make enough money this year.....( with 2 new Teslas in the driveway ). SO.......lets see what we can cut back on.


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## garsh (Apr 4, 2016)

Garlan Garner said:


> Its a half lie. Telsa could show all kinds of profit if they didn't spend it on growth.


In what world do you think that statement is reasonable?
He was clear that he was talking about "actual" profit, not "profit-per-vehicle", or anything else that ignores capex.


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## Wooloomooloo (Oct 29, 2017)

Garlan Garner said:


> Interesting.
> 
> I purchased Tesla because no one else was doing what they were doing. I was nearing retirement and wanted to secure it. I disagree with you in that it was luck. It wasn't "pure" luck. There were other options.


Agreed, it was a reasoned bet and it paid off. However Tesla nearly folded in 2018 and wasn't entirely out of the woods in 2019, but some exceptionally savvy capital raises by the company at the best possible timing (especially in 2018) kept the company afloat. Success wasn't guaranteed and the criticisms and concerns during that time weren't just "short thesis" conspiracies, they were quite real.

Now counter-intuitively, Elon's note shows that the company is seriously about making money and being a real player in the market, and isn't just some black-hole sucking up capital. If the shorts were right, Elon would be throwing caution to the wind, cashing in and letting the company run riot. He isn't, because unlike the people obsessed with the share price, he actually wants Tesla to succeed in its original mission, which wasn't to make bad investors rich, it was to nudge the planet to a more sustainable future.

Plenty of TSLA holders don't care at all about the future of energy or driving, they just want to cash in on the craze.


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## PNWmisty (Aug 19, 2017)

Wooloomooloo said:


> Agreed, it was a reasoned bet and it paid off. However Tesla nearly folded in 2018 and wasn't entirely out of the woods in 2019, but some exceptionally savvy capital raises by the company at the best possible timing (especially in 2018) kept the company afloat. Success wasn't guaranteed and the criticisms and concerns during that time weren't just "short thesis" conspiracies, they were quite real.
> 
> Now counter-intuitively, Elon's note shows that the company is seriously about making money and being a real player in the market, and isn't just some black-hole sucking up capital. If the shorts were right, Elon would be throwing caution to the wind, cashing in and letting the company run riot. He isn't, because unlike the people obsessed with the share price, he actually wants Tesla to succeed in its original mission, which wasn't to make bad investors rich, it was to nudge the planet to a more sustainable future.
> 
> Plenty of TSLA holders don't care at all about the future of energy or driving, they just want to cash in on the craze.


Tesla didn't almost "fold" in 2018. This is pure fantasy that gets repeated constantly and it can generally be traced back to Elon's comment that Tesla came within weeks of bankruptcy in 2018. However, they pulled through with growing revenue from strong sales. What Elon doesn't mention is that, had it been necessary, an emergency loan was never more than a phonecall away. It's pure fiction that Tesla almost folded.

It's also not true that they raised capital in 2018. What is true is that the media, short-sellers and some analysts were screaming at the top of their lungs that an immediate capital raise was needed all throughout 2018 or disaster would strike. Elon said it was not necessary and was proven correct as revenue from strong sales with high margins pulled them through. They did raise capital in early 2019 to prepare for future growth and in anticipation of historically slower sales and weaker margins in the first half of the year.

Most importantly, bankruptcy is only a potential outcome when a company can no longer raise capital and Tesla has never been even close to that point, at least not post 2012.

By 2019 Tesla's path to success was clear but that didn't prevent the media circus from publishing numerous misleading articles that made Tesla's position in the world seem tenuous and even fated for failure.

In 2018 I had a small token TSLA position of 100 shares because their future share price was somewhat uncertain to me (I don't like buying too early). I had been following TSLA closely since their IPO but had never been able to pull the trigger due to risk and valuation ratios until I took the small token position in 2018.

But as the price started falling in 2019 I started buying in earnest. I could see that the risk/reward ratio had flipped rather dramatically. I made a number of small purchases of between 100-300 shares between $260 and $220 that I felt very confident would be worth a lot more within 2 years . But when it hit the $180's amidst much FUD and fake and misleading news I was more confident than ever and couldn't believe my good fortune. Rarely does an investment thesis become so clear cut. I had been selling off other stocks and so was sitting on a large amount of cash. I decided the risk/reward ratio was too good to pass up so I watched the price action closely for any sign of potential reversal. When I saw it climb from $179 into the low $180's I doubled my position with a single large buy at market and watched as it continued to climb.

Over the next several weeks it became apparent that we were out of the hole but my position was too large to even consider adding to it even though the price was still very compelling. But when I saw how cheap 2021 leaps still were I started buying those at strikes between $320 and $620. They appreciated between 100 and 1000 fold!

Here's the interesting thing- People accused me and others of being too bullish on Tesla in 2018/2019 and tried to talk us into being "realistic". I'm a seasoned investor and I ride my own horse but I actually quit reading and participating here due to this forum allowing these Tesla detractors to run wild here. I felt like it was messing with my ability to logically analyze the situation. As long as they remained even slightly "reasonble" sounding, they were allowed to spread their FUD repeatedly even though their motives were as transparent as mineral glass.

I finally sold 26% of my shares before it hit the $800's, not because I think it was done appreciating but because it had become almost my entire portfolio. I'll probably hold the rest until I die but I'll never want for money. 

Tesla will never again appreciate over 20 fold in under 2 years but I do expect it to strongly outperform the broader market through 2030 and probably beyond. Those who value TSLA only as a car manufacturer will miss all the gains.

One more thing: Do you know why Elon is not concerned with the coming onslaught of competition?

Answer: Because he knows better.


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## Bigriver (Jan 26, 2018)

@PNWmisty, glad you popped back in. I always find your perspectives informative and interesting.


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## Madmolecule (Oct 8, 2018)

Tesla is the only correction proof stock on the market. The other companies will catch up in the E market one day, but Tesla does not have the baggage the other car manufacturers that I’ve been in it forever Have. Tesla barely made it and they were amazing, all that means is the ease of entry for the newbies is virtually impossible now. Because it won’t be big oil putting the finger on them, it will be big E. The only thing they could do to screw it up, is what I said earlier and that is release FSD before it is fully baked. I’m sure plenty of adults have had the discussion with Elon that you don’t punt on first down in the second quarter with the commanding lead.


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## M3OC Rules (Nov 18, 2016)

PNWmisty said:


> Tesla didn't almost "fold" in 2018. This is pure fantasy that gets repeated constantly and it can generally be traced back to Elon's comment that Tesla came within weeks of bankruptcy in 2018. However, they pulled through with growing revenue from strong sales. What Elon doesn't mention is that, had it been necessary, an emergency loan was never more than a phonecall away. It's pure fiction that Tesla almost folded.
> 
> It's also not true that they raised capital in 2018. What is true is that the media, short-sellers and some analysts were screaming at the top of their lungs that an immediate capital raise was needed all throughout 2018 or disaster would strike. Elon said it was not necessary and was proven correct as revenue from strong sales with high margins pulled them through. They did raise capital in early 2019 to prepare for future growth and in anticipation of historically slower sales and weaker margins in the first half of the year.
> 
> ...


Congrats!


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## Garlan Garner (May 24, 2016)

Anyone know why Tesla stock is tanking?


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## Needsdecaf (Dec 27, 2018)

Madmolecule said:


> Tesla is the only correction proof stock on the market.





Garlan Garner said:


> Anyone know why Tesla stock is tanking?


Because no stock is correction proof if enough investors decide it isn't meant to be.


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## Garlan Garner (May 24, 2016)

Needsdecaf said:


> Because no stock is correction proof if enough investors decide it isn't meant to be.


Its tanking because its not correction proof?


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## garsh (Apr 4, 2016)

Garlan Garner said:


> Its tanking because its not correction proof?


"We haven't seen TSLA at prices THIS low since....
(checks calendar...)
January!

It's not "tanking". TSLA is a volatile stock. You're reading way too much into stock price fluctuations.


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## Bigriver (Jan 26, 2018)

It's right in line with all the clean energy stocks on my watch list.


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## GDN (Oct 30, 2017)

One headline indicated the drop was the about JD Power inclusion and very poor ranking. I read an article about JD Power inclusion on Saturday and it hurts to see, but unfortunately it is needed. Tesla has no excuses for not uping the build and paint quality at this point, they need to be called out on it. The competition is here. Tesla should be running with perfect scores and reviews at this point.

Depends on who you ask, but many think the company is way overvalued too. Are they a car company? A tech company? Depends on who you ask. Even with what they have, is the valuation real and on target? Is the whole market ready for a correction, the last 10 months have been phenomenal and likely Tesla at the top of that pack.

Regardless, it's past time to shape up with quality.


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## Garlan Garner (May 24, 2016)

GDN said:


> One headline indicating the drop was the about JD Power inclusion and very poor ranking. I read an article about JD Power inclusion on Saturday and it hurts to see, but unfortunately it is needed. Tesla has no excuses for not uping the build and paint quality at this point, they need to be called out on it. The competition is here. Tesla should be running with perfect scores and reviews at this point.
> 
> Depends on who you ask, but many think the company is way overvalued too. Are they a car company? A tech company? Depends on who you ask. Even with what they have, is the valuation real and on target? Is the whole market ready for a correction, the last 10 months have been phenomenal and likely Tesla at the top of that pack.
> 
> Regardless, it's past time to shape up with quality.


Why do you think Tesla quality is worse than any other car?

The term paint correction and such was invented way before Tesla.

I went out to look at my wife's Kia Niro and its worse than my Model 3 on panel gaps. Maybe the problem with Tesla's are that people scrutinize them more than they do camrys. 
Sandy Munro's tune has changed from his original "Tesla's are horrible" to "Why aren't all of them perfect....like this one"?

Are you saying they haven't done anything to improve or are you saying that they aren't perfect yet?


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## Garlan Garner (May 24, 2016)

1. People don't like build quality
2. People don't like the paint
3. People don't like the software updates.

yet they love the car?

The shortest conversation about Tesla cars seems to be what people like.


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## GDN (Oct 30, 2017)

Garlan Garner said:


> Why do you think Tesla quality is worse than any other car?
> 
> The term paint correction and such was invented way before Tesla.
> 
> ...


We don't have to have a stupid conversation here. I've got two Model 3's. I didn't have a lot of complaint about either. However I don't live under a rock and I hear it from those that do. However, JD Power's, while likely not perfect, and maybe bought off and maybe not even fair, are widely regarded and people pay attention to what they have to say.

Every day buyers and people that do their research love Consumer Reports, they love to see their auto manufacture win awards, they do their research. They love to see factories ISO certified with processes. Many people buy and vote with their dollars and they go with the quality.

Tesla has an incredible word of mouth advertising, but there is a lot of negativity about it too. With no competition you don't have to worry or care, you will sell all you can make. When there is competition that isn't the same case. They are still selling all they can make and I love the car and brand, but you sometimes never have a chance to win a customer after they hear negative things or have a negative experience. They move on.

I know there are many factors that affect stock price, however, there are also at least a few writers that believe that the negative JD Powers review caused part of the price drop. Today alone $70/share - 9%. It may pop tomorrow, we don't know yet. However you tell me that you shouldn't be concerned with news of any kind that causes your company to lose 9% of it's value in a day.


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## JaBay (Mar 23, 2019)

Garlan Garner said:


> Anyone know why Tesla stock is tanking?


The possible and pending federal tax credit isn't helping.


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## GDN (Oct 30, 2017)

JaBay said:


> The possible and pending federal tax credit isn't helping.


Why would that hurt them? If more people have access to several thousand dollars to help them buy the Tesla (or other brands) why wouldn't this boost them, I don't see the tax credit being a negative.


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## JaBay (Mar 23, 2019)

GDN said:


> Why would that hurt them? If more people have access to several thousand dollars to help them buy the Tesla (or other brands) why wouldn't this boost them, I don't see the tax credit being a negative.


It will help when it is official and in effect. Right now many prospective buyers are waiting to order.


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## Garlan Garner (May 24, 2016)

JaBay said:


> It will help when it is official and in effect. Right now many prospective buyers are waiting to order.


Good point.

I wonder how many people are sitting around waiting for this tax benefit - who would have already purchased by now.

I hope this isn't an externally induced Osborne effect.


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## FRC (Aug 4, 2018)

During the first Tax Credit consumers realized little to no benefit from the US credit. When the credit dropped from $7,500 to $3,750 the Model 3 price dropped correspondingly. This happened again when the credit was reduced to $1,875. The net cost to the buyer was about the same whether you qualified for the $7,500 credit or none at all. The only substantial financial benefit realized was by Tesla themselves. I would expect Tesla to employ similar tactics if a new credit is enacted, so waiting to buy isn't likely to bear any fruit.


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## bwilson4web (Mar 4, 2019)

My understanding is Tesla has a production problem, not a demand issue. The honorable competition has a profit problem now that Tesla has converted some margin into lower cost. They have a worse problem than Tesla.

My expectation is they will short their volumes to avoid losing so much money per sale. 

Bob Wilson


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## Bigriver (Jan 26, 2018)

FRC said:


> I would expect Tesla to employ similar tactics if a new credit is enacted, so waiting to buy isn't likely to bear any fruit.


Tesla has been continually lowering prices. If there is a new federal tax credit, I expect they would stop lowering prices and maybe even inch them back up a thousand or 2. Or maybe up the price of some options or higher variants. But I don't think there will one for one price increases. I agree that that is essentially what happened before, with the price coming down as the credit reduced though.

If I were in the market for a new EV, I would hold off the purchase until I thought I could complete the transaction after the Green Act has passed. Wish they would change the language in the bill to make it retroactive to Jan 1 of this year, because I do see it potentially dampening EV sales until it passes.

As to the general topic of this thread, I think the reasons for the recent TSLA price decline are complex but I don't think they are long term. I have bought more TSLA the last couple of days.


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## TrevP (Oct 20, 2015)

I'm no expert but this temporary correction is just a small bump in the road. I've seen it before.
Lots of things coming that will boost the stock:

Tesla will have solid deliveries this year
Berlin and Austin coming online this summer and late fall
Cybertruck coming late this year
Possible $25K Tesla unveil later this year

Things aren't going to be standing still for long, we're just in a quiet period right now


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## slacker775 (May 30, 2018)

And the stock decline is part of all of tech heading down as money is moving into other industries expected to start chugging again as the pandemic starts winding down. Lots of fears of interest rates heading up and inflation so typical market movements around that. In other words, a good buying opportunity!


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## MnLakeBum (Mar 17, 2021)

I know the Model S is only a small fraction of Tesla's sales, but Elon's focus on profits is a big reason why the Model S exterior has not been updated since 2021 other than the front bumper cover/grill changes. I know several long-time Model S owners like me who are ready to replace our Teslas with a new one but may very well go with a Taycan or Etron GT because the Model S body is getting so tired. I want to get another Model S as they are a better value but may pay the extra $$ for an Audi GT just because the body style is sexier and fresher than the decade-old design of the Model S. Only offering 5 colors is hurting Tesla as well, IMO. Tesla can't get complacent with their design of the Model S. Otherwise, and they will lose many of us early Tesla adopters/fanatics. Maybe Elon is willing to concede the higher-end EV market to the competition.


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## garsh (Apr 4, 2016)

MnLakeBum said:


> Maybe Elon is willing to concede the higher-end EV market to the competition.


I think it's priorities. It's more important to the long-term health of the company to begin producing cars in the mass-market categories (Model 3, Model Y, and then the Cybertruck) than to spend too much effort refreshing existing models.


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