At the time of this video, Tesla's stock price touched $1200 during the trading hours,
but struggled to get past it. $1200 does appear to be a barrier, but once past then,
it's likely we are on the path to new highs. However, it did break the barrier after hours,
up to $1207, which is a great sign. When we get big news like record deliveries
that beat expectations then the market doesn't usually adjust the next day, it can take a week
or even two until we reach the adjusted trading cycle, as investors test out new highs and lows.
I would first just like to acknowledge what has happened. Tesla increased almost $150 billion
in market capitalization in one single day. I am pretty sure this is a massive record.
If you recall I bought options recently, not only because it looked like Tesla is about to have a
blow out earnings and deliveries, but because there were several other events circulating too.
One of them was the EV credit, which didn't come through, but we still have
some other major events around the corner, some could even come through this month too.
Obviously one that will definitely happen will be the Q4 earnings report, and shareholder questions
with Elon Musk. As for the actual earnings, well they look to be between 50 to 60% higher in Q4
than Q3. By the way, if you increase your net profit 50% each quarter, that ends up annualized
to be 5 times as much over a year. That's how big a deal this. This was attributed to just
a 28% increase in deliveries. Which is what I have been trying to explain. The economies
of scale that Tesla are reaching, means that OPEX is becoming relatively lower per vehicle. In that
a 28% increase in sales, equates to perhaps twice as much of an increase in net profit.
For a company this size to still be growing net profits by that much is unprecedented. Do
you understand? Tesla is still very much in the growth stage as a company, it just happens to
have already reached a valuation making it one of the largest companies in the world. But it
is only getting started still. Yet it is hard for investors and the market to fathom, that a company
of such magnitude still has such tremendous growth, it is hard to get your head around.
It's almost as if there is not enough money in the world for Tesla to reach it's valuations that some
of us estimate. Which is somewhat true, except the economy is not zero sum. Wealth is created not
taken, at least from companies that create value to consumers, particularly through technology.
I will go through my financial predictions, perhaps a couple of times before the results.
I have a feeling the next surprise we might also get, could be margins increasing. What with the
increase in LFP batteries being used, and the price rises. This could shock the market again.
Often there will be a big build up to earnings, and then the stock price will fall back down,
as people take profits. This makes selling options particularly difficult,
trying to time the sale is not easy. It's something I am also less experienced in,
given that I don't sell my Tesla shares.
And it wont stop there, we will have Elon on the earnings call, which is a big deal,
as he had decided not to do them any more. So if he is back on, it could be
because he has something important to say, or somethings important. He is going to give us
Tesla's roadmap as to what we will expect to see become of the company over the next few years or
so. We could get all sorts of major updates, new factories or extension plans of existing,
the compact model reveal update, in-house LFP battery plans, new growth targets,
4680 ramp up expectations, as some of the most important I can think of off the top of my head.
Yes, that is all major, but it doesn't stop there. We have the new factories too. And if you thought
28% growth in deliveries was good, well what happens when Tesla triple their capacity in a
year? This company has barely begun, it just happens to take a really long time to produce
about a million times more batteries in the world than world had about 10 years ago.
We need a lot of batteries. Now Berlin is a little hard to predict,
but Texas looks like its getting very close, and might open sometime soon.
This is going to give the stock a good boost. Not only that, if Tesla is up and running,
well that means it will be producing Model Ys, but not just any Model Y, the new Teslas,
with 4680 structural battery packs and front and rear die cast molds. This is Tesla's new product,
sure it looks very similar to the previous, but it's a big difference. We should finally
get to hear the specifications on what these batteries are capable of.
Not too far off one and a half years later since battery day, the product finally reveals itself.
We will get to see the difference in weight, performance and of course range. Although Tesla
may not disclose the battery size initially, it likely won't be long until we find out how many
kWh they will be using in the Model Ys. I also have a feeling that on the Model Y order page,
there will be a new optional extra, 4680 structural pack,
for an extra $5,000 perhaps. Tesla will save about $5,000 with the 4680s per vehicle
over the 2170s, and then they could add a further $5,000 on to the price too,
as it is still a better product despite it costing less. It will be interesting to see.
There is so much happening with this company right now.
I don't forget about Shanghai. We still need more data on what's happening there,
but it would appear to be a good indicator of just how impressive Tesla's manufacturing has become.
Then we will see further improved manufacturing processes in the new factories,
that should hopefully produce more vehicles per sq ft than Shanghai.
Everything is very positive for Tesla right now, the stock price could run for sometime.
There are other events to come too, of course Berlin would be good to open,
as that is creating a bit of stress, with all the delays. We have heard that the semi trucks
potentially could start delivery too. The semi truck is a very under looked product,
when you include FSD in there as well, it becomes an extremely valuable and profitable business.
But the biggest event that would create a further jump in the stock price would of course
be another stock split. I know this is what a lot of investors have been hoping for, since about the
last split. Personally, unless you are trading, I think it's small mindedness, it doesn't affect the
company in anyway, and wants all the excitement of the split calms down, investors mainly refer
back to the fundamentals again. But make no mistake, it will make the stock jump, and because
of how we saw it react last time, the market is going to be expecting something similar again.
But could we really consider another split only a year and half later after the previous? Well
factor this in, the stock price was at $1374 when the previous split was announced. After
all these other potential catalysts to the stock price I have just mentioned,
well I think it is highly possible that we could boost well above $1400 even. If the
new factories open, the 4680 Model Y specs are as good as we hope, and the financials are 50%
higher quarter over quarter, surely those events alone are enough to take us there.
I just want to make sure I have some options when the split is announced.
Which by funny investing behaviour, buying options because the stock is high, because its so high,
that the split might be announced. If a split is announced and it acts similar to the last,
then we are going to see a $2,000 stock price. Now that really is quite insane.
Well done to all of you who held through it all, well done buying on those dips,
and buying those options and LEAPS. I have now just about quadrupled the option I purchased
back not even 2 weeks ago. That is an outstanding return, and one of my LEAPS is now up 5 fold. Yes,
we may have to weather a storm possibly, there could be some sort of recession on the horizon,
and Elon Musk even tweeted about the potential of one sometime this year, or at the latest 2023.
But no one, not even Elon Musk can predict a recession. But it's best to prepare for the worst,
and hope for the best. So I will be going over how I am going to prepare for a potential recession,
and also do more analysis on how Tesla will cope through the recession.
My hope was that by the time we entered a recession,
that Tesla would have their FSD sorted and/or their compact Tesla available.
I think these two products would actually thrive in the recession.
Although Tesla will likely not have too much trouble in a down market,
I can't say the same for the competition. I am not sure this is good. I want more EV companies
to thrive. Tesla cannot do it all alone. If a lot of the rest of the industry goes bust, then
that will not be good for the industry, it needs momentum from multiple players in lots of areas.
Anyway, when these kind of events happen with Tesla, it's always very exciting.