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Tesla Wants To Win And Is Focused On The Long-Term – That Is Not Bizarre
Michael Kramer and the clients of Mott Capital own shares of Tesla
The headlines of a bizarre Tesla earnings call seem more bizarre than the actual call. Yes, Elon was a little bit more fired up than in other conference calls, but we have also seen him be that way on Twitter recently too. I’m not going to get into debates about Tesla stock valuation, because there is no middle ground, people either hate the stock or love it. I happen to love the stock, and the company, and what they are doing. Not because they are green, but because they are making awesome cars, that have awesome technology, and are a disrupting the entire auto industry, not to mention they are also a technology company reinventing the use of battery technology. And, people want the car, and it is flourishing.
Reviewing the Call
The one thing from the call that seemed crystal clear to me, he is focused on driving profitability. At around the 1-hour mark in an exchange with Phil Lebeau of CNBC, he commented on becoming profitable, and not being a real company until they are profitable. Then a few minutes later, Ben Kallo of Baird, asked a question about getting an update on when Tesla hit 3 or 4k model 3 ‘s per week. Elon appeared to be frustrated by the amount leaks coming from out of Tesla. Additionally, he made it clear he is not interested in the short-term nature of investors, but the longer-term goals.
In some regards, he is right, because in the past I have often complained that there has been too much made about whether the company missed it deliveries numbers by 500 cars, or beat by 500 vehicles. Because at the end of the day, the only thing that matters is that the longer-term trend is continuing to rise, and to this point, Tesla has been able to do just that. Revenue has continued to rise, production has continued to increase, and the number of cars on the road is continually growing. In fact, in the past two days, I have seen a Model 3 at least once each day. The Model S and X I see multiple times a day and are just as commonplace as any other luxury car.
To some extent, it comes down to the long-term focus of the direction of the company overall, and not whether they hit some number or not a week early or a week late.
If anything, from listening to that call, it was the most firey I have ever heard him, and he seems more focused than ever on driving profitable, I don’t call that bizarre, I call that competitive and wanting to win.
You can call it whatever you want, but that is how I see it.
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© 2018 Mott Capital Management, LLC. Use, publication or reproduction in any media prohibited without the permission of the copyright holder.