Tsla

I have been following Tesla for a while now, trying to justify the price and work on some assumptions of the future. So what I did last night was examine other auto maufacturers market cap, worldwide market share, and then come up with possible justified market cap if TSLA produces enough vehicles to match prior production at their NUMMI plant. This would equate to 1% of world production at 450,000 vehicles a year. The table here (might have to click on the image for larger) compares three large companies and figures out what TSLA market cap would be. For example, Ford has 46.9B in sales and has 18.4% of market share would suggest that 1% of market share could justify future cap of (46.9B/18.4) 2.6B. The comparitive cap shows in the 4th column OF THE ATTACHMENT.

My discussion
This does not account for non auto sales such as drivetrains to Daimler and Toyoda
This does not account for likely higher margins on early TSLA models
This might not be a good way to determine value, but it does suggest they have a ways to go to justify current price compared to GM and F but could grow 3-4 x to equal TM.

I'd like educated feedback on TSLA, my attempt at price justification.
Thank you.

 

Hello Bee Nurse!

I read your blog with interest. You are a nurse & a bee keeper and you raise your own pigs and I assume other animals an or plants. You are attempting to save up $3 mil by playing mother market in various retirement accounts.

I must admit to being a tough critic of these blogs and there was not enough meat not enough ideas in yours. The passage on diabetes was of interest but it dribbled off. I would suggest a few things.

First off, I too have been looking and LOOKING at TSLA. Why? Well as I blow by any Nissan Leaf or other crappola electric car presently on the market in my 91' Benz wagon I always think get in the gutter you fools move over. What if there was a fast electric car? Well for $100,000 there may be one with a big headed late night host at the wheel somewhere but for the average folks no. The new lower priced TSLA is of coursed of great interest. Just when to play that roll out is the question, a question I have been toiling with.

For now why don't you concentrate in an area you know?- Nursing. Nurses see a lot of cool medical equipment and they talk to a lot of Dr's running trials; nurses get a lot of valuable investing incites even though they may not realize it.

A couple stks from Thomas Weisels's ideas are of interest:

MAPP- various drugs for migraine headaches & DIABETES , asthma

HNSN- developer of medical ROBOTS, this is the way the future is trending and of interest to me.

TSON- minimally invasive lumbar disc stock! That's an implant I want to know more about.

WBMD- Weisel owns quite a bit of this name (29%!) a provider of health care content on the Web.

>>>>>>>>

I think health is an area you can focus on. I myself have always been a big lover of the bio's, there are a couple names you might pick up there as well.

>>>>>>>>>

You also know bees and there behavior. The bee hive is I'm sure very comparable to the market in whole and as such you may be able to discern grouping nature and attack nature and other interesting social incites. Besides honey is yummy, is there a way to play that in the market? Many bored rich folks have their own bee hives now it's become trendy-- are bees in decline? -- is their another way to pollinate flowers in science or are we dependent on the bee?

>>>>>>>>>>>

I think the moving of medical records over to digital read is going to happen and there's several ways to play that trend; SXCI was one that worked well in the past, I haven't checked on it lately but MRGE Health is one I like now-- they attach X rays to you records via the net. QDEL is a stock I have on my watch list but I forget why.

>>>>>>>>>>>>

WEBMD- WBMD reduced their 2011 forecast In July. Revenues are now expected to come in between $580 - $600 million which is well below their previous range of $610 - $640 million. The company cited longer sales cycles as the primary catalyst for the revenue shortfall. Many sponsorships are being held up due to legal review and some consumer products companies are even cutting their ad budgets.

That news took the stk down quite a bit into the low $30's.

What's of interest is recent market action of down 10% has not moved the stock down further... that's a " tell "..... The stock stands today at $ 34.50! How is that possible? It must be that WebMD is the dominant player in the online healthcare content space. In the first quarter of this year, the WebMD network delivered over 2 billion page views. Unique visitors were up 19 percent year/year......

Here is an opportunity I think Bee Nurse.

>>>>>>>>>>>>>>>

I have tech ideas and others but I want to keep you focused on what you may already know!

BUY: MRGE & WBMD I think that's what I'm going to do today and look into the other names. As long as the world is falling apart Oil should go down and the glaring need for TSLA will not be there.~stoney

 

What the heck Nurse Bee where are you?
Head stuck in a hive?

The world is only ending, stocks crashing and you are out there happy as a lark tending to your fowl.
Isn't it lovely? I too aspire to be a gentlemen planter. I have corn and tomato and have screwed up the rest. I have the world's best razzberry bush but that's wild- organic and all I do is water it. None of my blueberry tees have done anything in 3 years, I hear it takes a while... I transplanted two apple trees, they don't look so good. Ditto my thirsty Dogwoods. Often in the field I create little pithy sayings in relation to flowers and gardens and such which really match well with the market... alas I can never remember them by the time I drag my sorry ass to the house.-- One might of been ' Dealing with a Hose leaves mud on your hands ' I think that was in relation to a Chase staffer.

Shall we tell them the truth? It's harder than hell to keep property and gardens up to spec. And harder than heck to live through these terrible market times.

Anyway more on TSLA-

Tesla: Is Elon The Next Steve? Merrill Launches With Buy
Aug. 8 2011 - 9:15 am | 3 views | 0 recommendations | 0 comments
Here’s a bold idea: Is Tesla Motors founder and CEO Elon Musk (who happens also to be the founder of the rocket company SpaceX) , the most promising tech CEO since Steve Jobs?
Merrill Lynch analyst Steve Milunovich raised that notion this morning in a research report in which he launched coverage of the electric car company with a Buy rating and $34 target price. The stock closed last week at $24.24.
“Tesla designs, manufactures, and sells high-performance electric vehicles and electric vehicle power-train components,” he writes in the report. “The auto industry might change more in the next 10 years than the last 100. Electric vehicles represent a new category that Tesla could lead given that new entrants tend to win when disruptive technologies emerge. In our view, CEO Elon Musk may be similar to Steve Jobs in being a technology visionary also able to manage and create shareholder value.”
Milunovich sees risks in the stock, but finds them to outweighed by the company’s potential to be a significant player in the auto market.
His list of positive:
Tesla’s range makes the car “uniquely attractive.”
Model S looks like a winner as “no-compromises sedan.”
Model S should be price at little premium to competition due to lower cost technology, purchasing power of partners and absence of legacy costs.
Street models may underestimate the long-term revenue opportunity.
But he also notes some risks:
Tesla lacks manufacturing experiences.
Pure electric vehicle might be too big a leap for consumers.
Battery technology in the cars is “opposed to industry direction.”
Weaker economy could reduce demand.
TSLA this morning is following the broader market lower: the stock is$1.30, or 5.4%, to $22.94

I am centered on the 5 following stocks-

TSLA
MRGE
SNCR
EBAY
RPXC

~stoney

 

Stoney,
The stones you throw are weak ones and the advice you offer is unsolicited. The advice I solicited is not answered.

 

Harsh reply, whether your question was answered or not.
What a B****.

 

Hey Bee Boy what the heck! I guess I read you wrong. I have found some cool folks here through the virtual world of ET: first there was the famous hedge fund retiree $COSTAVERAGEMAN and there was the famous ex southern guitar twang man TOPDOWN and there is Stock777 and Shortie and I might say a few ladies who I initially thought were men... and then there's you.

When I see a sad unanswered thread and someone who has taken the time to write a really average blog, I try to help. Throwing stones? How about throwing you some great ideas you bee stung dolt.

I mean really, someone with over half his life spent buying stocks, over 23 years experience, someone who has seen it all drops some info on you and you respond that your question has not been answered. How about starting with how stupid the question is. You cannot create a valuation metric for TSLA off other car makers roll out numbers; rather look at GM's massive break of the IPO price and the price of oil going down so fast and understand that the play is in the announcement of orders for the new cheaper TSLA models, coupled with an understanding that the world is not drifting into a global recession.

That being said one might look at the CEO of TSLA and say no matter what it costs this cat is going to get the job done... he might blast us off into space too-- it's a renegade call on life-- like Virgin and Branson.

I thought I saw in you Nurse B some junior attempts at rationalizing the market and the more interesting angle of being a farmer/ planter / person who lives in the woods. I have met quite a few of those-- and I'm always amazed how much of the market doesn't matter when your lugging huge amounts of topsoil around and digging out weeds and keeping an eye out for bears (the real kind). But alas you're just a cranky nurse and we already have enough of those. Imagine letting someone with your personality thrust a needle in your arm! Think about it. I wouldn't let you change my bedpan, I'd throw you out of the room. Nursing is a fine art like many professions, a good nurse can save a whole unit in a hospital.

Unfortunately your reply reveals not just a bad bedside manner but a shallow intellect to go along with your lack of respect. For such a young user of ET you obviously have no idea who replied to your silly question. I am the stonedinvestor.

Anyway I'm not going to let a little snot gathering on your part ruin the fact that these are important times and important times need important ideas. We have one foot in the abyss and we have certain amount of trickery involved with the markets selling. Inverse and 2 X ETF's and Flash Trading and the seeing of other folks stop orders have culminated in a broken system and an unfair playing field. Ever wonder why we never " Flash " up? Why no 500 point up days?

My thesis was always that this day would come-- (albeit I thought later in Aug) -- and the end result may be a small cadre of high dividend stocks being the only stocks played any more. The idea of a stock market that goes up over time is being wrung out on the rocks.

Why would the Republicans have done this? Why not the Grand plan? You can answer that question yourself but all of those in the know knew that the only way to avoid this downgrade was to answer the market far before the deadline with a Grand Plan... the sad thing is the Plan would never have to be carried out-- just the prompt announcement of a plan to raise the debt ceiling and cut spending would have appeased S&P enough; it would of been a much wiser way of kicking the problem down the road.

Now we have a strategy put forward by the Republicans to ruin the economy to send Obama packing-- to help usher in a recession. I do not hold the President blameless, far from it-- he has been a mealy mouthed re former of words lately -- a man so sad he can't even say the word " taxes " That kind of weakness, of saying " revenue " instead just highlights the Jimmy Carter in him-- and when he talks of raising revenue through asking millionaires to pay there share-- he has a lot of support even from those millionaires-- but then he brings the bar down to $200,000. This is class mongering of the worst sort-- in some years that would include me! Just a guy who barely survives in NYC, with 2 mortgages and a wife who likes to spend.

Anyway, today is a big day. I would like to crawl out of this box o fear and make an
big investment in one of the names I gave you-- I am favoring either MRGE or EBAY at this point. However, if the market was to truly bounce & pick up steam after some Fed speak today I will also go with SNCR & RPXC.

I hope you find some honey.~stoney

 

YES! How bout dat! All you can do is beat the market Nurse B!-

MRGE 5.80 +0.53 +10.06%
EBAY 30.16 +3.21 +11.91%

I think I love these new members of the family. I'll use any movement up to lighten up on some other more spec names. Stay tuned. TSLA didn't do that much. Dropping RPXC from watch list for now & SNCR no movement.

WebMD WBMD was up $2 I have a good vibe on this name. This is stk number 1 for tomorrow morn.... I think maybe we should of bought that one today. I mentioned it earlier but in rebutting your rude response I lost track.

Anyway, I'll leave you now to your own dreamstalking in the pumpkin patch. I'm sorry for intruding on you thread. Just remember one day Nurse B to tell your grandkiddies how you got that fine cost basis on EBAY and MRGE! ~stoney
MATYCH

EBAY
MRGE
WBMD

 

Huh?

 

Sometimes Nurse B it is all too much to understand. I graduated Boston University in I think 1986! Elon Musk the CEO of Tesla graduated U of Penn in 1995. I am older than the CEO of Tesla. Elon Musk upon graduation decided to tackle three areas of life that bugged him-- The Internet, clean energy and space. Upon graduation I decided to tackle three areas of life that bugged me-- Music, DJing, drugs and sex. I did those at Andy Warhol studios where I had a job in the film &TV unit. In 1998 Elon co-founded PayPal; in 1998 I was still publishing the now famous Stock Newsletter StonedInvesting. In 2002 Musk started SpaceX, just as I had stopped taking Ecstasy.

In 2003 Musk founded TSLA with the goal of bringing a $100,000 electric car to Jay Leno. About this time I finally embraced the internet enough to make my first purchase online-- a 1991 MB wagon w/ fuel injection and west coast paint job and 92,000 miles on her. Musk's car goes from 0 to 60 in about 4 seconds. That's faster than my Datsun 240 Z I had back in the 80's and much faster than the MB wagon.

Now what? I'm still driving the same car except she's got 137K on her now and Musk will be unveiling his new car in mid 2012-- The Model S. This one will cost $50K still an absurd amount. Without a generous Gov subsidy I don't think these $50K car's will sell very well, nevertheless tesla plans to pump out 20,000 a year.
20,000 X $50,000 = 1Billion I think dollars! If the profit margin is around 25% then the co's gain could be in the $250 mil range and to that you could divide by shares etc......

Of course the fact is right now all we have is 1,500 TSLA'a on the road anywhere in the world. The stock price of TSLA found some fans as it poked above $22 in Dec 2010 and the stk roared to $36 area. In March 2011 the stock cratered but found support at that same $22 level, in fact twice, creating a firm double bottom.

From $22 again we marched up but made a lower high at $30. and here we sit at $25... so what now? A broach beneath $22 setting up a lower low would be very bad for the name. Is there a $5 march back to $30? And could it break higher from there?

I am thinking about all these questions this morning. One tactic would be to buy the name now for those $5 upside vs $3 downside to a mental stop out below $22. I think this makes the best sense. the other way to play it is to wait for a break out above $30 and ride it back to the highs $36... that seems unlikely in this market.

A fairly recent secondary was pulled off by TSLA at $28.76, I'm not sure there was much interest it seems Musk the CEO bought up a lot of it. He can afford to. Overall 5.3 million more shares were brought to market at that $28.76 those folks are now trapped underwater-- this leads me to think that a move up will fizzle out around $30 as some of those folks raise capital at a break even point-- not bad for what we have seen the past two weeks.

One of the other big buyers of the secondary was Blackstar Investco LLC, that seems a little scary, who is Blackstar? I would feel better with Blackstone. Goldman Sachs had an option to buy in up to 795,000 shares I do not believe they took that option. That is of some small concern.

The Model X Tesla is coming in 2013.

Weighing all of that info, I believe there is at least a $5 trade in this name from this point and I am considering buying in today.

To be continued ~ stoney

 

The initial models of the S will not be 50K, they will be the 300 mile version which adds a 20K premium onto the base 55K price, so more like 75K.

While I don't have a problem trading from a chart, it becomes easy for a world of chart monkeys to lose money. So I try and do research, test assumptions, and PREY upon a target. Listening to the last conference call one could learn that they had around 5k "orders" for the new model S. These orders are really just easily refundable deposits. Having visited a recent TSLA roadshow (sat in a roadster, saw pre-alpha S) I learned that any additional orders would likely not be promised until 2013. So the possible maximum sales of S models would be 375 million (75K x 5K).

What I want to figure out is, some way of understanding this company possible expansion in the world to justify buying and holding. I dont want some 10% gain in a few days (hence don't want stock tips from some NY shop keeper that catches some dribble while polishing shoes). In the zero sum world, I want 10x, or 100x, at the expense of those with little patience or discipline.

Those with discipline would know more of the story or be able to google "blackstar investco" to learn which automobile manufacturer had the gullwings to back Musk. They would also notice that Fidelity owns almost 15% of the stock...

In conclusion:
I'd like to know more to justify price expansion in the stock over the long term.