NEW YORK (TheStreet) -- After Tesla Motors TSLA tanked in after-hours trading Wednesday on a revenue beat, but earnings miss, I contacted TheStreet contributor Anton Wahlman for reaction.
Why? Because he's not a bean counter. He thinks about the big picture. He conducts on-the-ground research in Silicon Valley, among other places. And his hard work produces some of the best articles on TheStreet.
Prior to earnings, Wahlman said to pay attention to Model S demand and Tesla's timeline to profitability. After the report, he emailed:
The only thing that matters in this report is that they have accelerated profitability by 9 months (4Q13 to 1Q13) while maintaining the 2013 sales goal of 20,000 cars. This is a clear incremental positive.
Everything else is noise ...
Wahlman stayed consistent not because he wants to be right, but because he is right. There's a relatively small, yet meaningful difference between the two things.
Investors misunderstand some stocks to the upside. Netflix NFLX -- prime example. Though I don't agree, others consider Amazon.com AMZN the poster child. Other companies/stocks get misunderstood to the downside. Pandora P , though on a nice run of late, and Apple AAPL come to mind, but there's no stock more misunderstood -- whether it's going up or down -- than TSLA.
Tesla's different for many reasons; in particular, because it's more of a political battleground than a Wall Street battleground. It's bad enough when the media influences sentiment -- and, subsequently, the stock price -- on names such as AAPL or Facebook FB with run-of-the-mill versions of mindless reporting. But it's worse when it plays a role in shaping how people feel about Tesla the company on the basis of governmental policy vis-a-vis the electric car and other so-called "environmentally-friendly" initiatives.
Bearishness towards or even disdain for Tesla often ends up being little more than an outcome of hatred for Barack Obama or "liberal California." The Feds and the state provide tax breaks to people who buy electric cars so, just like that, there's no way EVs can be good -- as cars, as innovation, as a business, as anything.
Like conservative and former General Motors GM executive Bob Lutz has said several times, right wing smear campaigns cloud reality and rational conversation over electric vehicles.
Tesla's not a car company. It's closer to Apple and Lululemon LULU in spirit and execution than it is Ford F or GM. In fact, Apple could learn a lot about its roots and better protect its image by taking a close look at Tesla.
Most people in North America (or the world for that matter) will never see a Model S in person. You have to live in certain pockets of the continent (or, again, the world; about a quarter of Tesla's reservations come from outside of the U.S./Canada/Mexico) to catch a glimpse of one, in the flesh, parked curbside, in a lot or zooming down the avenue.
Wahlman hangs in Palo Alto, Calif.; he sees them all of the time. I'm in Santa Monica; I see about one a day now. I expect that number to increase as has been the case with the Nissan Leaf and Chevy Volt over the last year. While Tesla will never reach Toyota TM Prius-like ubiquity, it will come close on an adjusted basis.
In other words, a relatively small number of people can obtain a $65,000 to $100,000 luxury vehicle, therefore, you'll naturally see fewer of them, on the whole, than you do a $20,000 to $30,000 hybrid or $30,000 to $50,000 EV.
And that's cool. That's all Tesla needs. Just like LULU doesn't need the world to drop $150 on yoga pants, Tesla is not, probably never will and has no reason to shoot for mass adoption. Like Apple (or, at least like Apple should be), Tesla is not a market share story. It's a high-end, exclusivity alongside aspirational consumer wow-factor story.
People gawk in Tesla Stores the same way they do in Apple Stores. Except most of us cannot have a Model S, whereas plenty of folks can put together the right number of nickels for an iPod.
That's the story. And Wahlman's correct. Everything else is noise.
--Written by Rocco Pendola in Santa Monica, Calif.