Stockchase Opinions

Brian Kelly Tesla Inc TSLA-Q SELL ON STRENGTH Oct 25, 2021

https://www.cnbc.com/2021/10/25/tesla-hertz-ev-deal-signal-to-rental-car-fleets-its-time-for-electric.html It joined the $1-trillion club today. It saw a massive breakout today, despite all the haters, which impacts what people think of the fundamentals. Tesla will definitely contribute to the de-carbonization of the electric grid. He won't short Tesla, but he's very skeptical of this at these levels. We're probably in the last phase of this bull market. The stock will probably go straight up. (Fundamentals don't matter.) This could hit $2,500 in a few quarters, and then he'd sell it.
$1024.755

Stock price when the opinion was issued

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DON'T BUY

Over time, every major car company will have a slew of electric vehicles and TSLA won't be the only game in town. Brand's been damaged a bit from Musk's activities. Still not cheap. Better places to go with less risk.

DON'T BUY

Musk is a remarkable entrepreneur, but there's a lot of promotion involved. Right, particularly in the US, the people driving Teslas aren't happy, given DOGE and the White House. We see the backlash with protests. If Tesla survives 10 years, there will probably be a lot of revenue from self-driving cards, but Tesla has to get there. The brand has fallen out of favour. If things go badly in the White House, it would reflect more badly on the company, because Musk is so tied to the White House.

DON'T BUY

As a car company, never made sense to pay the demanding multiple. So an investor has to put faith in the technology side, and he's not comfortable with that. Musk is in the news big time, and he's not gaining any friends. International blowback against TSLA and Musk, reputational risk. Sales numbers weak.

WAIT
Is all the bad news priced in by now?

The stock is down 40%, but at 50% that's when it hits bottom and that's when you enter. So wait.

DON'T BUY

On the chart it's a buy. But price to growth is unhinged. Don't buy this one.

DON'T BUY

He drives a Tesla. Musk stepping away from Washington is likely a good thing, but the stock trades at a ridiculous 150x PE. Bulls will argue that robo-taxis are coming, but we're not there yet for self-driving cars (he tried it himself).

PARTIAL SELL

He reduced his position given macro risk, though the company has done a fine job navigating tariffs. He believes in their self-driving technology, which will be one of the biggest transition in coming years. As for the Musk boycott and falling Tesla sales around the world: Musk has always been controversial, and he says he's returning to Tesla full time. 

COMMENT

Down, and Musk has been slamming his own brand. In fact, he should probably leave the company; Board has been debating this.

BUY

He believes in their self-driving cars. He expects Trump to allow these cars on the interstate.

DON'T BUY

Trading at extremely high valuation. Cult stock. Can't really value it on today's earnings. Have to hope the battery technology takes off and that robotaxis becomes a huge thing. Lots of irons in the fire. If you believe the Musk-hype, this is a must-own.

For the rest of us, who can't cope with the valuation, very hard to buy. Sometimes the growth comes and it works out, and then you wonder why you didn't pay 800x PE ;)