How 4 Will Cost Elon Musk & Tesla 20,000,000 in 18 Days

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Well ladies and gentlemen today i want to talk about why a $54 difference can mean the difference of nine hundred and twenty million dollars and why this is very important for not only elon musk but tesla in general and also tesla shareholders okay i want explain this in depth not a lot of people understand it so if we look at tesla stock right now it’s right

Around three hundred and six dollars a share why does this matter well tesla’s gonna have nine hundred and twenty million dollars in debt coming due that is basically gonna happen if tesla shares are not around three hundred and sixty dollars by march first which means tesla stock has about eighteen days which is even less if you take into account how many trading

Days are actually are a tesla stock has basically eighteen days to go up about fifty four fifty five dollars and if that happens tesla will not have to make a nine hundred and twenty million dollar payment no i want to explain why this is very big for tests of the company why this matters so much because not a lot of people really understand why this matters

So much and i want to talk about what is the likelihood that tests the stock will go up fifty four dollars a share over the next eighteen days and what will need to happen if that’s gonna happen okay so if we look at tesla like we spoke about it’s around three hundred six dollars so it needs to go up about fifty four fifty five dollars to reach that level if we

Look at tesla’s balance sheet right now they have close to 3.7 million dollars on it as of right now now some of that money on cash and cash equivalents is like untouchable money so you might say well 920 million out of you know 3.6 billion or so you know that’s a decent chunk out of that but it’s not all the money so it’s not like tesla’s gonna go out of business

Or something like that yeah that’s true but it’s still a considerable amount when you look at what tesla is coming for over the next year or so okay they need every dollar they can have in their cash balances averno right now now the good news about this is they are supposed to possibly pay out this debt in about half stock half cash which means out around four

Hundred and sixty million dollars would leave that balance sheet which is still a considerable amount of money when you’re talking about three point six billion some of that being money that’s basically untouchable money that tesla really can’t even touch of this moment and when you look at how much tesla has coming down the road okay number one we’re talk about

Why is this a big deal number two can the share price get to $360 in the next 18 days no the first reason why this is a big deal if we look at what tesla’s done over the last couple quarters first it has been profitable okay they have you know eat out some net incomes but they’re not huge amounts of money i know are they in the grand scheme of things that sounds

Like a ton of money right two hundred fifty four million dollars and two hundred and ten million dollars sounds like a ridiculous amount of money but for a company that tests the size it’s actually not very much net income at all now keep in mind that tesla delivered a ridiculous amount of high-end model threes during that time to the united states so meaning that

Those were probably tesla’s most profitable cars as of right now that they ship an heavy over the past few quarters all right that’s something to take into account and we have seen that tesla model 3 delivered in the us has dropped substantially all right now they are starting to deliver into the eu into china so a lot of their models are going out there but if we

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Look at inside evs which is pretty accurate as far as these numbers go the estimate only around 6500 model threes came to us buyers in january which is ridiculously down versus what they had posted you know basically all in the fall time and even into the late summer time so a big question comes up now like how profitable if a profitable at all can tesla be in this

Upcoming next few quarters when model 3 demand has slowed substantially in the us and if we think about like this model 3 is supposed to come down in price well as model 3 comes down in price right hopefully tesla has cost advantages but it might not mean any extra money for tesla in the end as it brings down the prices so say for instance tesla saves $1,000 well

They might just bring down the model 3 price by $1000 so they kind of cancel each other out you can maybe get some more volumes out of that and that would be a good thing for tests overall but it’s not as big of an impact as you might think as cost reduction comes because they’re kind of probably lower price more and more all right if we look here cost to ship

A car from california to china it’s a you know estimated around $2,500 to $6,000 per vehicle meaning that either tesla has to take that hit or customers in china have to take that hit somebody’s taking that massive hit to ship cars all the way from california to basically to china and whatnot there’s also a substantial rate that basically if you’re shipping from

California to europe as well so either way it’s a lot of money we’re talking about and someone’s taking that hit it’s either tesla’s taking that hit or the customers are taking that hit which means vehicles get more expensive if we look at model three in china right now it starts at seventy two thousand dollars as of right now seventy two thousand is what model

Three is starting to and china now you know as a tough shareholder you know i think under model three it’s awesome does it starting model 3at seventy two thousand dollars makes sense in my personal opinion now now some people will still buy it some people buy anything at any price but i mean seventy two thousand dollars from model three it’s just enough car that

In my personal opinion that’s worth seventy two thought a thousand dollars out of starting model like that is insane in my personal opinion okay now also model why is supposed to be ramping up some point in very early 2020s actually supposed to show off model why in 2019 which this model you know even must has talked about it could be fifty percent higher demand than

What model three i you know i was expected you know me to even get one of these model wise when they come out especially you know if it has a good design it has good spacing in it and you know it’s it’s somewhere around a realistic price point of maybe let’s say fifty thousand or somewhere around there now keep in mind the model wise gonna have a lot of similarities

To the model three so the ramp up might not cost as much for tesla as say the model three ramp up did but it’s still gonna be a substantial cost to get in the model y ramped once they end up doing that okay it’s gonna take a lot of money out of tesla’s balance sheet that they’re gonna have to use for infrastructure to build out that line especially if we’re talking

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About 50 percent more demand than what the model three had okay so regardless whichever way you want to cut the mustard there it’s gonna be a lot of money alright also tesla’s shanghai’s being built and now tesla is supposed to finance this project with chinese money basically the chinese banks are looking over all the loan terms and whatnot trying to figure out

Their best bet but there is construction literally going on on that shanghai factory right now no i believe that money is probably coming out of tesla’s pocket that’s at least all the construction that’s going right now i believe that money’s coming out of tesla’s pockets because they haven’t you know agreed to a term with any bank in china for the full loan yet so

And now also test the laid-off 7% of its full-time staff recently now there’s always a bunch of one-time costs that come whenever you lay off a bunch of staff especially when you’re talking about thousands of employees which in this case i think it was around three thousand employees in total we’re laid off from tough so you’ve got a bunch of one-time costs end up

Hitting the company and so if you’re looking at it from a long-term perspective you know it obviously is a cost advantage but if it’s looking at a short-term that’s gotta hurt profitability a major way at least for this upcoming quarter so that’s something to take into account so needless to say tess is not in a position like some of the other big tech companies

Like an apple or facebook or google where those type of companies you know a few hundred million dollars or even a few billion dollars it’s like nothing you’re talking about facebook or google or apple or those type of companies like it’s nothing ok if they have to make out 920 million dollar debt payment that’s like you or i like buying a can of soda right it’s

Nothing to them but to tesla at this stage it’s still a substantial amount of money when you look at all the projects so the question is how how likely is it that tesla stock could go up fifty four fifty five dollars in a matter of eighteen days okay well it’s actually a little more likely than you might think you might think that’s so unrealistic but then you

Looked at tesla stock chart and we can find three times just in the past year alone where tesla shares have gone up 50 dollars or more in that time span if we look at the beginning of june to around middle of june over $50 price moved there and tesla stock if we look at toward the end of july to the beginning of august we’re going to see another 50-plus dollar

Move in tests of stock alright and then if we look at it let’s say late october into the very early beginning a part of november we’re gonna see another 50-plus dollar moved there so three times over the past year tesla stock has moved up well enough in a you know a few weeks time two or three weeks span to basically cover a move like this alright so my opinion the

Chance that tesla rises fifty-four fifty-five dollars in the next 18 days i would put it at around a ten percent probability and you might ask how could a move like that even happen okay on my opinion there’s two scenarios that could get tesla stock to move up that much that fast the first scenario is someone that has a super famous investor which there aren’t a

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Ton of them but a super famous investor actually invested or a huge a very popular investment fund actually buys in to tesla in that info goes public maybe they even go on cnbc or bloomberg about why they’re so bullish on tesla but it needs to be a very famous investor it needs to be a very popular investment fund a massive hedge fund or something like that that

That has never really bought tesla stock in the past and they just made a substantial position in tesla then they go on cnbc and bloomberg and all these other the publications and they talk about why tesla is gonna be a thousand dollar stock if something like that happens we could get a massive move up because whenever you have a super famous investor coming to

A stock all of a sudden you’re gonna have a ton of money follow through because you basically have a lot of funds that will basically allocate money however a super famous investor does or another big fund does okay so that’s one way that could happen the second way this could happen is if a big tech firm invests in tesla and the info also goes public so someone

Like a google or an apple or a facebook or an amazon or somebody like that or maybe even another big chinese company we know $0.10 already has an investment in tesla maybe someone like an alibaba makes a big investment that information actually goes public if you give something like that cause then you get people’s wheels spinning and wow this big tech company

Just invest a bunch of money in tesla why would they spend a bunch of money in tesla they must believe in that company a lot long term maybe there’s partnership deals that can you know help tesla expand around the world even faster and things like that okay so if you’ve got something like that then we could be looking at a massive move up in tesla stock price and

Literally a few days span or a few weeks span but outside of those two possibilities i don’t think there’s anything else out there that could happen with tesla in the next two or three weeks that could get tested and move up huge like it would have to but this is a very important thing guys it’s not something that’s like oh this is going to bankrupt the company but

If we’re looking at how fast tesla can expand their business model over the next few years you know four hundred sixty million dollars to the time about half stock half cash four hundred sixty million dollars you can do a lot with that money to help build out infrastructure in a much more rapid pace than what you could if you don’t have that money on the balance

Sheet essentially so i hope this did a good job of explaining the debt coming due for tesla and why it’s a big issue and i would love to hear your guys opinion down there in that comment section as always thank you for watching make sure you smash that thumbs up button and have a great day so look at this this has nothing to do with today’s video but i was just

Looking up you know you know what they’re saying about model 3 sales in january what not the la times in its look at though look at the headline right there at the top left-hand corner like i could understand why right wing doesn’t trust anybody from honestly the the media it’s like unbelievable headlines like that if i completely understand why they don’t trust

The media that’s the bottom line i used to not understand it now i kevin reading headlines like that right on the front page it’s embarrassing

Transcribed from video
How $54 Will Cost Elon Musk & Tesla $920,000,000 in 18 Days By Financial Education

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