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
- Nike Shares Surge 7% Pre-Market as Elliott Hill Becomes CEO; FedEx Shares Tumble 13% After Profit Miss • IH Market News • 09/20/2024 10:02:58 AM
- AIG names new CFO; Progyny Drops 24% After Losing Key 2025 Contract; Exicure Jumps 190% With Nasdaq Extension • IH Market News • 09/19/2024 10:26:48 AM
- Microsoft Boosts Share Buyback, Raises Dividends by 10%, Intel Secures Chip Deal with Amazon • IH Market News • 09/17/2024 10:40:35 AM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 09/10/2024 12:02:19 AM
- Dell, Palantir, and Erie Will Be Added to the S&P 500; Boeing Avoids Strike; Apple Event Takes Place Today • IH Market News • 09/09/2024 10:05:35 AM
- Broadcom Down 10% Post-Earnings, UiPath Up 8%; Qualcomm Eyes Intel Assets; Salesforce Acquires Own Company • IH Market News • 09/06/2024 11:59:00 AM
- Travala Now Available on Skyscanner, Siemens Issues New Digital Bond on Blockchain, Bitcoin Volatility on Thursday • IH Market News • 09/05/2024 06:09:29 PM
- Qualcomm Develops Mixed Reality Glasses; Verizon to Boost Dividend, Eyes Acquisition; Samsonite Plans US Dual Listing • IH Market News • 09/05/2024 10:11:35 AM
- Nvidia Subpoenaed by DOJ, Athira Pharma Shares Plunge 71% After Study Fails, Zscaler Falls 15% Post-Earnings • IH Market News • 09/04/2024 09:50:25 AM
- Intuitive Machines Soars 18% on NASA Contract, Intel Considers Splitting Operations, Dell Reassesses Selling SecureWorks • IH Market News • 08/30/2024 10:00:08 AM
- Big Lots Falls 27%, Considers Bankruptcy; DraftKings Acquires Simplebet, Berkshire Hits $1 Trillion • IH Market News • 08/29/2024 10:06:50 AM
- High Volatility Expected in Nvidia Report, Ambarella Soars 20%, Hertz Strengthens Board, Apple Cuts Jobs • IH Market News • 08/28/2024 09:50:36 AM
- Apple Names New CFO, Sony Hikes PS5 Price in Japan, Santander Launches Share Buyback • IH Market News • 08/27/2024 09:35:22 AM
- Cruise and Uber Join Forces for Robotaxis, Alibaba Shifts Primary Listing to Hong Kong, Altria Hikes Dividend 4.1% • IH Market News • 08/23/2024 12:20:26 PM
- Schwab and Snowflake Retreat in Premarket, WeRide Postpones IPO, Halliburton Cyberattack, McDonald’s Instagram Hack • IH Market News • 08/22/2024 09:37:42 AM
- Walmart Sells JD.com Stake, Microchip Suffers Cyberattack, Union Pacific Warns of Strike in Canada, and Latest News • IH Market News • 08/21/2024 12:12:11 PM
- Berkshire Reduces Stake in BofA, Hawaiian Airlines Soars 10%, Paramount Receives $4.3B Offer, and More • IH Market News • 08/20/2024 09:56:02 AM
- FuboTV Soars 12% After Venu Sports Block, Goldman Sachs Lowers U.S. Recession Odds, BHP Ends Chile Strike • IH Market News • 08/19/2024 09:28:19 AM
- Deutsche Bank Faces Shareholder Backlash, Bank of America Sponsors 2026 World Cup, Quanterix CEO Buys More Shares • IH Market News • 08/16/2024 10:03:21 AM
- Google Mandated to Modify Play Store, Apple Innovates, Victoria’s Secret Hires CEO, Mars Buys Kellanova • IH Market News • 08/15/2024 10:05:46 AM
- Google Forced to Modify Play Store, Apple Innovates, Victoria’s Secret Hires CEO, Mars Buys Kellanova • IH Market News • 08/15/2024 10:05:46 AM
- UBS Beats Earnings Forecasts, Intel Divests Arm Holdings, Flutter Surges 9% in Premarket Trading, and More • IH Market News • 08/14/2024 09:56:35 AM
- Dell Stock Slide Offers Opportunities; Trump and Musk hold talks on X; GM Restructures China Operations, and More • IH Market News • 08/13/2024 09:43:49 AM
- Starbucks Rises 3%; Disney Unveils New Films and Expansions; Uber CEO Questions Tesla Robotaxi Viability, and More • IH Market News • 08/12/2024 09:46:16 AM
- Joby Aviation Seeks Australian Certification, Arcadium Lithium Projects Suspended Due to Oversupply, and More • IH Market News • 08/07/2024 09:47:32 AM
VHAI - Vocodia Partners with Leading Political Super PACs to Revolutionize Fundraising Efforts • VHAI • Sep 19, 2024 11:48 AM
Dear Cashmere Group Holding Co. AKA Swifty Global Signs Binding Letter of Intent to be Acquired by Signing Day Sports • DRCR • Sep 19, 2024 10:26 AM
HealthLynked Launches Virtual Urgent Care Through Partnership with Lyric Health. • HLYK • Sep 19, 2024 8:00 AM
Element79 Gold Corp. Appoints Kevin Arias as Advisor to the Board of Directors, Strengthening Strategic Leadership • ELMGF • Sep 18, 2024 10:29 AM
Mawson Finland Limited Further Expands the Known Mineralized Zones at Rajapalot: Palokas step-out drills 7 metres @ 9.1 g/t gold & 706 ppm cobalt • MFL • Sep 17, 2024 9:02 AM
PickleJar Announces Integration With OptCulture to Deliver Holistic Fan Experiences at Venue Point of Sale • PKLE • Sep 17, 2024 8:00 AM