It would seem that Elon has just about finished selling his Tesla stock.
It has been well over a month now since another controversial tweet from Elon Musk.
Asking the Twitter community if he should sell 10% of his stock.
As a result the stock price dropped from not far off it's high, somewhere in the 1200s, and
due to Elon's sell off and the markets reaction, the stock price actually reached lows of sub 900
on a couple of occasions. But the fact that Elon has sold the shares he was planning on,
or if not all of them entirely, the end is now at least in sight.
This seems to be received well by the market.
It was not only the news of Elon selling off his stock, but the physical selling itself,
that has been affecting the stock price. Then when you add on Omicron scares to this,
the stock price dropped as much over 25% in about the space of a month. The stock price
was actually lower than it had been at the start 2021. Almost one year on, and the stock price
lower than the high for January. Yes, sometimes the stock price does get ahead of the company,
the market over reacts. Particularly with Tesla, and the EV industry. I am not sure people realize
yet, that the EV industry is incredibly slow to grow. Look how long it has taken Tesla so far,
and it still won't hit a million deliveries for the year.
But one year later, with a growth company, not to mention the NASDAQ also up 50% over that
same period. So just to re-iterated. A highly successful growth company was the same price it
was nearly a year ago, whilst the market has risen 50%. Sometimes Tesla goes on a serious sale. This
was one of them. Assuming no major market crash on the way, as that's generally how these runs end.
Oh and over that year, we saw that Tesla Shanghai factory already has about twice the capacity we
were told, and likely much higher. We also witnessed these two enormous new factories
successfully built, with minimal issues. Just some permits and regulation to get sorted with Germany.
These two projects were a success. Along with the 4680 built vehicles soon to come off their lines.
And all the other events that we saw this year. Such as the Model S Plaid,
successfully becoming the quickest production car in the world. Likely as a result of using some
of the chemistry from the 4680 batteries. And of course AI Day, further ensuring the future of FSD
for Tesla. Although I say Tesla's core products will be their batteries, Tesla's main profit
potential is going to come from their software, and AI, in the likes of FSD. It will not only
be incredibly profitable, it will transform transportation and commerce as we know it.
Anyway, I bought some options when the price was around $1020,
about almost a month ago, as it looked like a good price then. I managed to magic up some money,
and transferred it into my account. Sometimes I really do just pull money out of thin air,
however way possible, so I can make sure I get in, when it's really on sale. Of course
the funds took a few days to transfer, and the stock price was sub 950 now, and even dipping
lower at times. I thought I was a little bit late in getting in, by the time my money transferred.
But Elon still wasn't finished selling either. So I put a really silly offer in a Mar 18 2022
call option with a strike price of $1,000. The order executed for just $66 for the option.
Since I bought it, 2 days in a row, before Christmas, Tesla's stock price was surging,
I am already up 150% in two days. And I think it looks to be continuing that trajectory. I am
expecting Tesla to recover all of this week, I am hoping to see the price hit 1100 this week,
although that would now only require a 3% gain. There is possibly a little more
selling to come from Elon, but the market is possibly too strong now,
and should support this price level. The market just wants to know, what Tesla's
stock price once Elon is done selling, and we don't have any major macro scares.
Personally I think there is little reason for it not to return to 1200 again.
For those of you also with call options, doing something similar to me, then you all seem to
have options in February and March too. These options get to cover delivery numbers, earnings
report and the earnings call. The deliveries will likely be higher than expectations,
and I am expecting earnings per share to possibly be about 50% higher than the previous quarter.
The earnings call is particularly important this quarter too, as Elon is back,
perhaps Elon will still be on the end of year earnings call from now on, as he has said he
will longer be doing the earnings call. But in this earnings Elon is going to give us the new
roadmap to Tesla. There could be a lot of very interesting and exciting things mentioned there,
along with new potential targets. Perhaps an LFP reveal, a 4680 production target,
estimated capacities of the new building, timelines for regulation on FSD, specifications
on the new 4680 Model Ys, a compact Tesla reveal, and of course an update on the Cybtertruck launch.
This will hopefully give us an idea of what to expect for the year, and what to anticipate in
the way of the new factories. This is a big deal, as I think it needs to be explained,
that nothing dramatic will likely be happening for much of the first half of the year.
I think the year will start with a bang, record deliveries, record earnings,
new factories opening, 4680 launch. I think all of these events occurring within close
proximity to each other will maintain some good momentum in the stock price. But by about March,
then these events should be wrapped up, at least hopefully the new factories are fully operational
by that stage. But Texas doesn't have to open, so much as the announcement of the opening party, at
least an indicator. I think each of these events could bump the stock up $100 or so. Therefore I
think it possible, not necessarily likely, that Tesla hits $1500 some time early next year.
Depending on how these events play out. But $1300 to 1400 surely feels likely, again if these events
all happen in this small period of time, it could just be a lot of momentum at once for the company.
Either way, macro events aside, it's not unreasonable to expect a new all time high.
And I am sure most of you agree with me. I put my money where my mouth is,
there don't seem to be that many times the Tesla stars align like this,
so I am taking advantage of it. Of course with options comes the tactic of selling too. It can
be easy to sell too early before you doubled your money again, or hang on too long and lose
half. But it currently feels like there is still more momentum left in the market for Tesla stock.
Tesla owners just received a Christmas present from Tesla too,
with a new operating system in the car. It is much better, and gives a better idea or sense of
how app oriented it is becoming. It just helps you grasp at further paradigms of where this product
is headed. I've got to say, it's so good now to be talking about Tesla, as an owner now too.
My thoughts are though, that after these major events,
then we will feel a lull. There may not be much more excitement for a while. Whilst we see these
new factories ramping up. Profit margins will be lower, profits may also be lower. Ramping
speeds may not be as fast as Shanghai. There may be production line issues with the 4680s.
Basically it's going to take a while for Tesla to prove they can ramp up these new factories,
and there are a lot of new variables involved, which means potential issues could rise.
But at this stage, I can't see too much coming up to push the stock price.
But this is Tesla, and you always want to be holding, even if the stock might dip a little.
And remember, it may only be dipping from $1500 down to 1200,
which is still pretty good. There are other events that might also come up to increase
confidence though. A new factory announcement would give a boost, but we have been told
to not expect a new factory for sometime. But this refers to a new factory location.
I think Tesla will keep building new factories pretty much immediately once these current
factories are completed, on the existing sites. The Austin site is absolutely enormous. We are
expecting the buildings to potentially increase about 5 fold still. The same is true for Berlin,
an increase of about 4 times the factory size to be built over time. What is stopping Tesla
building them out immediately? Well as long as Tesla can build battery factories with them,
then there isn't too much to constrain their growth. They have all the funds they need,
supply chains issues likely improved soon enough,
and enough construction crew as they just completed the previous buildings.
So I think seeing current factory expansion might help the stock price a little
I think the reveal and some specs on the compact Tesla should also give the stock price a boost.
Hopefully Tesla are still managing to target that $25,000 price point. Although that might
be a bit harder with the inflation we are witnessing. But the fact Tesla reveals a car,
actually for the masses, at least masses in developed nations. A car that was not previously
thinkable to so many consumers, in fact buying a new car in general, was not something a lot
of the consumers ever considered before a Tesla compact. This should add excitement in the market.
And I really hope Tesla give us another battery day,
and present their LFP batteries. Although it will likely go over the head of most investors,
like the first battery day, it will be great to understand how much of a role LFP will play in
Tesla's future. But it may not boost the stock as much as it should. Tesla's 4680 battery day,
did very little for the stock price. I don't think it will be fully valued in until the new
factories ramp up, and we finally see the extra profit margin 4680 batteries have generated.
But that's stock prices for you, they often play the short game, and can't look into the future
so much. It's like the say a bird in the hand is worth 2 in the bush, except with stock prices its
worth more like 10 in the bush. Well Tesla still has a lot of birds in the bush.