Tesla Future

[GoSouthYoungins]

I think this pretty fairly covers all the options. I'm starting to think that the Tesla bears are not such a minority here, but only one way to find out...

[GoSouthYoungins]

Curious for everyone who is voting for "just another EV company" (or for "bailout w/out restructure") what they think a fair share price would be. Trillion dollar answer implies $6000 a share. 7 and 11 obviously equal ZERO.

[GoSouthYoungins]

For those of you who think it is option 1, you should take on as much leverage as possible to load up on TSLA and cash in on this 20 bagger! Enjoy.

[oren]

Curious for everyone who is voting for "just another EV company" (or for "bailout w/out restructure") what they think a fair share price would be. Trillion dollar answer implies $6000 a share. 7 and 11 obviously equal ZERO.

It really depends on too many unknowns. My best estimate is for Tesla to be a leading EV company (i.e. more than "just another EV company") but not a trillion dollar company. Share price depends on a load of factors - investor sentiment (mainly), profits, growth prospects, "story", and more. It could go to $200 (even with success) or to $1000 and even more, but I very strongly doubt $6000 within 5 years. Or Model Y, the Semi and the Pickup could be commercial flops due to bad design or a true mass-market "Tesla killer" EV from the competition, and then the company could go under. But I attach a very low probability to that, given the current situation of the company and the worldwide personal demand for EVs, supported by rising awareness to pollution and climate change.
Should all other automakers decide to drop the ball on EVs and leave it all to Tesla, things could be different, and then the sky is the limit. But I hope for the automakers' sake and the common good that they (some or most of them) make a good transition to EVs.

[crandles]

What does $trillion company mean?
Last quarter turnover near 7 billion so that requires ~40 times turnover increase in 5 years. That seems a bit rapid to my mind. But maybe you had stock market capitalisation or something different like that in mind? (179 million shares at $294.71 gives current value at ~$50 billion so ~20 times growth in value in 5 years: still seems steep)

Is there room for a 'successful $100-1000 billion pa turnover company' option?

[wehappyfew]

Curious for everyone who is voting for "just another EV company" (or for "bailout w/out restructure") what they think a fair share price would be. Trillion dollar answer implies $6000 a share. 7 and 11 obviously equal ZERO.

...and...

For those of you who think it is option 1, you should take on as much leverage as possible to load up on TSLA and cash in on this 20 bagger! Enjoy.

Both indicate an unwarranted assumption:
... Constant number of shares.

The history of Tesla disproves this assumption, and there is little or nothing to stop Musk, Tesla, and SpaceX from making any number of  further "interesting" financial moves that would and could greatly increase the number of shares outstanding.

For example, buying a major automotive player who gets in trouble with their battery supplier and can no longer make ANY battery powered vehicles...  can no longer meet increasingly stringent govt emissions standards, and therefore faces bankruptcy or bailout.

Tesla offers an all-stock deal worth pennies on the dollar, gains a huge manufacturing capacity, combines it with their Panasonic battery supply, and is instantly 20 times larger. On paper, at least.

Point being, the number of shares is maybe 20 times bigger after such a deal. Stock price is about the same, maybe lower due to the enormous risk. A good time for shorts like yourself to get out.

[GoSouthYoungins]

Both indicate an unwarranted assumption:
... Constant number of shares.

I mean you are right. At the current rate Tesla will have 50% more shares outstanding in 5 years. BUT this is all super approximations since the variance is so huge, so it really doesn't matter. However...you may be onto something: with 50% more shares, it would only take a share price of about $4000 to be a $trillion company. Ah ha, now I know where Tasha and Cathie over at ARK derive their price target. Although, at the current rate they are selling, they'll have no shares by summer. Which is smart of them since they don't take positions in penny stocks.

[crandles]

Both indicate an unwarranted assumption:
... Constant number of shares.

True, having to issue lots of new shares to raise cash could be a bad sign they are in trouble or it could be a good sign of wanting to invest more faster so perhaps potential mixed signal if going down the market capitalisation route. Perhaps why I preferred the turnover option to the market capitalisation option.

Model 3 at twice current rate then more in model Y might get to more than 4* current turnover plus some semis and pickups and some big increase in static storage energy business. But it is hard to reach 40 * turnover without again considering merger/takeover of a larger company which might get you to turnover and/or market capitalisation target of $1trillion but doesn't mean a current investment now yields 20 times value.

.

End of Q4 didn't have any stock on ships so $3billion cash and reserves is not going to be representative of times

[Rob Dekker]

I was hesitating between "trillion dollar company" and "just another EV company".

The thing is that stock markets don't make much sense to me.

Apple is now worth $1 trillion, by providing a product that costs the typical consumer $30/month.
A car costs 10x that at some $300/month for the typical consumer, so maybe Tesla can become a $10 trillion company ?

If so, why is GM only valued at $50 billion while producing many more cars than Tesla does ?

Is it just because their sales are in decline ?
If so, what will happen when Apple sales start to level off ? Or Amazon's ?
Will their stock tank ?

[b_lumenkraft]

What does $trillion company mean?
Last quarter turnover near 7 billion so that requires ~40 times turnover increase in 5 years. That seems a bit rapid to my mind. But maybe you had stock market capitalisation or something different like that in mind? (179 million shares at $294.71 gives current value at ~$50 billion so ~20 times growth in value in 5 years: still seems steep)

Is there room for a 'successful $100-1000 billion pa turnover company' option?

Well, the price of a stock always also reflects a bet on future profits (or losses). So when Telsa has a market cap of 1T in 5 years, that doesn't mean the company is accurately worth this much on that day.

So this means when investors have reason to believe Tesla might become a 1T dollar company in say 5-10 years, this market cap is not unrealistic for this day in 5 years.

[crandles]

I was hesitating between "trillion dollar company" and "just another EV company".

I haven't voted for any option due to lack of necessary option between these two.

The thing is that stock markets don't make much sense to me.

Apple is now worth $1 trillion, by providing a product that costs the typical consumer $30/month.
A car costs 10x that at some $300/month for the typical consumer, so maybe Tesla can become a $10 trillion company ?

If so, why is GM only valued at $50 billion while producing many more cars than Tesla does ?

Is it just because their sales are in decline ?
If so, what will happen when Apple sales start to level off ? Or Amazon's ?
Will their stock tank ?

Yes, expected growth makes a big difference.

Value of growing or shrinking perpetuity can be considered to be valued as a present value(PV). The formula being: PV = D/(r-g)

where D is dividend, r is the discount rate and g is the growth rate. If g appears to be significant proportion of r the PV increases noticeably. (If g is bigger than r then either that growth rate won't last long and you need a more complex formula that takes account of this period and what happens next or you have the wrong rates for r and/or g.)

Size also matters, if you are already selling to 90% of world population then there is probably not much scope for further growth. With GM there is probably more scope for shrinkage than there is for growth. A lot depends on expectations: if shrinkage begins when expected then there may well not be much share price movement. However if Apple or Amazon started shrinking when further growth was the expectation then there would be a big downward correction in the share price.

We can deduce that the market expectation is for Tesla to grow much more than GM.
(Shorts pushing FUD probably don't want to hear this conclusion and can somehow ignore it preferring their own reality version that it is just irrational exuberance.)

[crandles]

Well, the price of a stock always also reflects a bet on future profits (or losses).

I was asking whether $1trillion referred to turnover or market capitalisation or something else. You seem to be assuming you know the answer then reflecting on the meaning of that one answer.

Voting before you know what the options mean or when the natural expectation seems to be a missing option does not seem sensible.