Musk: Tesla must cut costs or stock will be ‘crushed like a souffle under a sledgeham
12-03-20, 07:05 AM
#16
Pole Position
It’s pretty crazy that this one guy can say something and Tesla stocks drop 4%.
https://m.benzinga.com/article/18622...Fwww.google.ca
https://m.benzinga.com/article/18622...Fwww.google.ca
Also, don't ignore the news last night that Goldman put a $780 price target on TSLA. That would be over 30% growth from today's levels.
12-03-20, 07:29 AM
#18
Pole Position
Money paid for stock shares does not simply go into a vacuum. Even the broker who sells the shares to an investor only gets a commission on the sale, not most of the money from the stock-sale itself. A good part of that money ends up benefitting the company. What you say is true, though, that Musk was referring to the negative reaction of future investors, in a lower share price, if Tesla does not start making higher margins.
This part is not fact, though, but just my opinion......if it wasn't for the huge number of Model 3 sales, Tesla would have been in serious trouble several years ago. That vehicle has been a gold mine for the company.
This part is not fact, though, but just my opinion......if it wasn't for the huge number of Model 3 sales, Tesla would have been in serious trouble several years ago. That vehicle has been a gold mine for the company.
12-03-20, 07:30 AM
#19
Lexus Fanatic
The same reason stock prices always rise or fall....demand, unless the price is artificially manipulated, which is not only difficult to do but illegal and a Federal Offense.
So, the next obvious question is...why did demand fall? Only the investors can answer that, and it will probably differ from person to person, but my guess is that some of them are simply losing confidence in Musk's ability to run the company.
Last edited by mmarshall; 12-03-20 at 07:40 AM.
12-03-20, 07:31 AM
#21
Lexus Fanatic
Thread Starter
12-03-20, 07:32 AM
#22
Pole Position
Most likely because Elon himself suggested the stock price is too high and profit taking. I mean the thing went up almost $200 in a little over a week so it is time for a bit of a breather to digest the gains or take some off the table. Plus this past week was just a weird dynamic for alternative energy stocks with Nikola losing the lifeline that is GM and etc.
12-03-20, 07:37 AM
#23
Lexus Fanatic
Thread Starter
12-03-20, 07:38 AM
#24
Pole Position
Their margins are low due to their aggressive expansion and investment. Also, a huge part is manual reworks of cars due to defects and huge warranty expenses with their avg build quality cars. I mean when you have a tent full of workers fixing paints, panel gaps, duct taping parts in the middle of the night, its going to cost you salaries and OT. WHen a customer comes back because the paint started peeling, that's another expense. Trying to penny pinch is a self defeating purpose when they should invest in bettering their manufacturing process and improve efficiencies of the manufacturing process. Maybe they should go hire away a few Toyota production engineers or something. You cant cost cut your way out of problems.
12-03-20, 07:41 AM
#25
Lexus Fanatic
That's not manipulation, though....at least according to the legal code for it. Like I said above, I suspect that some potential investors are losing confidence in his ability to run the company. Situman, above, also brought up some valid issues.
Last edited by mmarshall; 12-03-20 at 07:44 AM.
12-03-20, 07:53 AM
#26
Lexus Fanatic
Thread Starter
I never said it was manipulation. I firmly hold my position that it was interesting
12-03-20, 07:54 AM
#27
Pole Position
12-03-20, 07:55 AM
#28
Lexus Fanatic
Thread Starter
12-03-20, 07:56 AM
#29
Lexus Test Driver
Thats not why the stock dropped though. When a stock reaches a certain point, investors think its run its course and sell and this helps to cause volatility in the stock. Most investors LOVE Musk and want him running the company. The Board of Directors has ABSOLUTE faith in him and wouldn't dream of removing him. You don't bite the hand that feeds you. If you read the analyst reports and attend all the earnings calls, its evident that Musk has total control of this company. Also, he has a unique form of control over Tesla where he holds 22% of the company but it takes 2/3rds of total votes from the BoD to enact major changes to Tesla's corporate structure. That means to oust Musk from control, they would need around 90% of votes outside of Musk votes to overturn anything he wants to do which is extremely difficult. He basically has free run over the company as the founder and almost nothing outside of total fraud will keep him from the CEO role.
12-03-20, 08:05 AM
#30
Lexus Fanatic
Thread Starter