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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.
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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.
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Right
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.
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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.
Night
-Mike
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This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.