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1/ Today's must read: jaw-dropping report from @lorakolodny about wild claims made by Musk on yesterday's investor call preparatory to $TSLA capital raise. $TSLAQ cnbc.com/2019/05/02/elo…
2/ "Tesla expects to have 1 million vehicles on the road next year that are able to function as “robo-taxis,” Musk said... Each car should be able to do 100 hours of work a week for its owner, making money as a robo-taxi he told investors."
3/ Pay no attention to that prospectus statement about using funds for general corporate purposes: "On the call, Musk said Tesla would be able to fund its business needs through cash flow, but that it was wise to have a buffer in case of a recession or weak global auto demand."
4/ "Musk said that competitors such as GM’s Cruise and Alphabet’s Waymo can’t catch up because Tesla has a fleet of connected cars on the road today, and a proprietary chip." Umm, GM & Waymo, any comment?
5/ Musk-speak: "A Tesla will be worth $150,000 to $250,000 in 3 years, he claimed. He also said that a full self-driving upgrade will increase the value of any Tesla by a half order of magnitude, or five times."
6/ Musk to Investors: Shut-up with your questions about the existing business: "Musk and other Tesla execs declined to give details when it came to more pragmatic issues like where the company’s order book stands today..."
7/ $TSLA's claim it aims for 25% gross margins on the Model 3? That's so yesterday. "Musk told investors Tesla would try to improve efficiency in its supply chain, but would feel good about 20% gross margins moving forward."
8/ What's that you say? The prospectus doesn't mention robo taxis? Sorry. Rules are for little people. Musk just did the wildest 180 in business strategy we've ever witnessed. He completely discarded promises of profitable auto, solar, storage business & pivoted to a new fantasy.
9/ I'm more confident than ever that $TSLA will lose $2B+ this year and won't deliver even 300k cars. So, how will investors react to this?
10/ Let's not fool ourselves. For some retail investors, this is pure religion. If Musk announced tomorrow that $TSLA was abandoning cars to focus on converting cow patties to energy pellets, they would praise his disruptive genius & follow him.
11/ As for the institutions & more sophisticated investors, TBD. But this is the wildest ride I've ever witnessed. It's pretty clear the SEC, DOJ, FTC, NHTSA, and rating agencies won't lift a finger to stop this craziness. It's up to the market.
12/ Great work by Lora Kolodny. Read the whole thing. Here's that link again. cnbc.com/2019/05/02/elo…
