Thursday, December 13, 2018 9:54:08 PM
Bloomberg Esha Dey,Bloomberg Wed, Dec 12 7:43 PM GMT+4:30
(Bloomberg) -- It was only a few months ago that Wall Street was bashing Elon Musk’s Tesla Inc. One analyst called the stock “no longer investable,” citing Musk’s erratic behavior in tweets and taunts. A short seller bet on a dramatic drop, saying it’s “more and more apparent that Tesla is having difficulties paying their bills.”
But an unexpected thing happened along the way: The company found its footing as an electric-car manufacturer, an achievement masked by Musk’s bluster. Its stunning third-quarter profit picture, boosted by its ability to ramp up production of Model 3 sedans, surprised naysayers, and marked the beginning of a turn in market sentiment.
Tesla’s stock is, somewhat improbably, right back near the highs it reached on the day of that infamous “funding secured” tweet that caused a furious rally before landing Musk in trouble with the SEC. And so after a year of stomach-churning swings that saw the stock post half a dozen rallies or selloffs of 20 percent or more, it is up nearly 18 percent. Not bad at all when you consider that the S&P 500 is down 1.4 percent on the year.
All of this, of course, could easily shift again at almost any moment, given Musk’s penchant for impolitic remarks and the many operational challenges. But for now at least, Wall Street is bullish once again, expecting Tesla to be profitable and have positive free cash flow in the fourth quarter -- accomplishments that would show the company has finally figured out how to produce cars at a stable pace and make money while doing it.
“Was the third-quarter a fluke? Time will tell,” said Roth Capital Partners analyst Craig Irwin. “But the reality is that when you produce 50,000 cars a quarter, that is a big milestone, and you can see these guys are here for the long run. Tesla is squarely on its own two-feet now, and learning and well prepared to keep learning.”
Tesla’s stock has always been priced for perfection, and Musk’s Twitter habits weren’t the only roadblocks that investors faced in 2018. As it frantically tried to boost production of the Model 3, Tesla was burning cash at a rapid pace -- as much as $8,000 a minute as it entered the year, according to Bloomberg calculations. Musk acknowledged how dire the problem was in an interview last month, saying the company’s earlier cash bleed had left it just a couple of months away from collapse.
Tesla’s fundamentals are now improving, helped by increasingly efficient manufacturing, strong prices of its cars, and the “slow and disappointing” competition in the electric vehicle market, Oppenheimer analyst Colin Rusch wrote in a note published on Wednesday. “We believe as TSLA delivers steady cash flow, a new group of investors will begin taking positions, helping drive shares higher.” Tesla shares jumped as much as 1.4 percent in New York.
Bond Outlook
Much like the stock, Tesla’s bonds have had a volatile year and investors remain cautious. The unsecured bonds hit a record low around 83 cents on the dollar in September, moving up to 87 cents in a muted rebound after the third-quarter results.
Tesla told holders of $920 million of convertible debt due in March that it would settle the conversion with a 50-50 split between cash and stock, a sign that the company could be on the path to consistent profitability and positive cash flow generation going forward.
Plenty of reasons for skepticism remain. Tesla is still highly levered up and 2019 is going to be an “uphill battle,” Cowen analyst Jeffrey Osborne said. He cited the expiration of electric vehicle tax credits and the lack of pent-up demand for electric cars that helped Tesla in 2018, among other things.
And despite the corporate governance reforms in Tesla’s settlement with the SEC, the company is still at the mercy of Musk to control his behavior as its public face and chief decision-maker. He responded to an exodus of top executives this year by assuming some of their responsibilities himself, and he bristled in a “60 Minutes” interview at the idea that he now has a babysitter supervising him.
Electric Rivals
But Tesla’s premium valuation today reflects its leadership in electric cars, far ahead of potential competitors. Analysts said they weren’t impressed by two would-be electric rivals unveiled this year by Audi and Mercedes-Benz.
General Motors, which is expected to sell about 4.7 million vehicles globally this year, had a market capitalization of $49 billion through Tuesday. Tesla’s is nearly $63 billion though it’s likely to sell only 256,000 vehicles.
“It is incredible to me, at the end of 2018, that the major automakers still haven’t figured out how to respond competitively to Tesla,” JMP Securities analyst Joseph Osha said. “Tesla plausibly can grow at 8-to-10 percent for a really long time, so it should be valued a lot more highly than companies growing at one or two percent, which is what the rest of the auto business is growing at.”
https://www.yahoo.com/finance/news/elon-musk-getting-last-laugh-110000804.html
GO TESLA, INC
"PEACE"
$$$$$$ ZING, ZING, ZING, ZOOM ZOWIE! $$$$$$
AMADEINAMERICAENERGYTECHNOLOGYANDCARCOMPANY
Recent TSLA News
- Form DEFA14A - Additional definitive proxy soliciting materials and Rule 14(a)(12) material • Edgar (US Regulatory) • 05/10/2024 08:16:06 PM
- Novavax Surges 57% Post $1.4 Billion Sanofi Deal; Apple Boosts Data Centers with AI and Internal Chips, and More News • IH Market News • 05/10/2024 12:02:56 PM
- Form DEFA14A - Additional definitive proxy soliciting materials and Rule 14(a)(12) material • Edgar (US Regulatory) • 05/09/2024 08:21:03 PM
- Bain Capital in Talks to Acquire PowerSchool; Blackstone Emerges Victorious in Hipgnosis Bidding War, and More News • IH Market News • 05/09/2024 11:53:19 AM
- Meta Platforms Expands AI Ads, Apple Boosts iPhone Shipments, and More Highlights • IH Market News • 05/08/2024 12:27:48 PM
- Form DEFA14A - Additional definitive proxy soliciting materials and Rule 14(a)(12) material • Edgar (US Regulatory) • 05/07/2024 09:16:57 PM
- Tesla’s April Sales Down 18% in China, Amazon’s Multi-Billion Dollar Cloud Expansion in Singapore, and More News • IH Market News • 05/07/2024 11:44:00 AM
- Form DEFA14A - Additional definitive proxy soliciting materials and Rule 14(a)(12) material • Edgar (US Regulatory) • 05/06/2024 08:16:07 PM
- Form PX14A6G - Notice of exempt solicitation submitted by non-management • Edgar (US Regulatory) • 05/06/2024 06:37:09 PM
- Perficient Stock Soars 52.9% Post-Acquisition; Luminar Declines 10% Amid Workforce Cutbacks, and Other News • IH Market News • 05/06/2024 12:09:00 PM
- Futures Pointing To Roughly Flat Open On Wall Street • IH Market News • 04/30/2024 01:07:52 PM
- U.S. Index Futures Point to Mild Decline Ahead of Key Earnings and Fed Rate Decision • IH Market News • 04/30/2024 11:59:59 AM
- Alphabet CEO’s Billion-Dollar Wealth, Microsoft’s $1.7B Indonesia Investment, and More News • IH Market News • 04/30/2024 11:58:40 AM
- U.S. Stocks Finish Quiet Day Modestly Higher • IH Market News • 04/29/2024 08:25:53 PM
- Philips Stocks Soar 47% Following US Deal, Tesla Bolsters Presence in China, and More News • IH Market News • 04/29/2024 11:11:24 AM
- Anglo American Rejects BHP Group’s Offer, Toyota Invests $1.4 Billion in Indiana, and More News • IH Market News • 04/26/2024 11:48:07 AM
- Futures Pointing To Sharply Lower Open On Wall Street • IH Market News • 04/25/2024 01:09:21 PM
- U.S. Futures Drop in Pre-Market Trading as Tech Stocks Plunge After Meta Issues Gloomy Forecast • IH Market News • 04/25/2024 11:53:54 AM
- U.S. Stocks Finish Lackluster Session Little Changed • IH Market News • 04/24/2024 08:33:00 PM
- Block Innovates Bitcoin Mining, DOJ Proposes 3-Year Prison for Changpeng Zhao, and More Crypto News • IH Market News • 04/24/2024 05:50:55 PM
- Upbeat Earnings News May Lead To Extended Rebound On Wall Street • IH Market News • 04/24/2024 01:09:05 PM
- U.S. Futures Display Mixed Results Amid Earnings, WTI and Brent Crude Prices Dip in June Futures Trading • IH Market News • 04/24/2024 11:31:20 AM
- Tesla Surges 12% with 2025 Affordable Vehicle Promise, Evotec Slumps 36% on Uncertain Outlook, and Latest Earnings • IH Market News • 04/24/2024 11:29:58 AM
- Coca-Cola and Microsoft Sign Billion-Dollar Agreement, Apple Event Set for May 7, and More News • IH Market News • 04/24/2024 11:28:02 AM
- Stocks Close On Firm Note For 2nd Straight Day On Earnings Hopes • IH Market News • 04/23/2024 09:00:38 PM
Avant Technologies Equipping AI-Managed Data Center with High Performance Computing Systems • AVAI • May 10, 2024 8:00 AM
VAYK Discloses Strategic Conversation on Potential Acquisition of $4 Million Home Service Business • VAYK • May 9, 2024 9:00 AM
Bantec's Howco Awarded $4.19 Million Dollar U.S. Department of Defense Contract • BANT • May 8, 2024 10:00 AM
Element79 Gold Corp Successfully Closes Maverick Springs Option Agreement • ELEM • May 8, 2024 9:05 AM
Kona Gold Beverages, Inc. Achieves April Revenues Exceeding $586,000 • KGKG • May 8, 2024 8:30 AM
Epazz plans to spin off Galaxy Batteries Inc. • EPAZ • May 8, 2024 7:05 AM