TSLA Jan 2021 65.000 call

OPR - OPR Delayed Price. Currency in USD
0.00 (0.00%)
As of 9:40AM EDT. Market open.
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Previous Close158.50
Expire Date2021-01-15
Day's Range158.50 - 158.50
Contract RangeN/A
Open InterestN/A
  • Tesla's Model 3 earns insurance industry's top safety rating

    Tesla's Model 3 earns insurance industry's top safety rating

    The IIHS has given the Model 3 its highest rating, top safety pick+. It said the Model 3 earned good ratings across the board for crashworthiness. The car's structure held up well in the driver-side small overlap front test, IIHS said.

  • Bloomberg

    Tesla Model 3 Wins Top-Tier Safety Award from Insurance Group

    (Bloomberg) -- Tesla Inc.’s Model 3 earned a coveted Top Safety Pick+ award from the Insurance Institute for Highway Safety, after the sedan performed better in a crash test than the Model S.The Model 3 earned “good” crash ratings in each of IIHS’s tests, including one that measures how vehicles perform in front, driver’s-side-corner collisions. The Model S fell short in the small overlap test in 2017, with the group finding drivers could sustain a skull fracture.Elon Musk has for years crowed about the safety of Teslas, sometimes to the chagrin of U.S. regulators. The National Highway Traffic Safety Administration sent the chief executive officer a cease-and-desist letter last year regarding claims the company made about the probability of motorists being injured in the Model 3. Tesla’s boasts were inconsistent with NHTSA’s advertising guidelines, and the agency told Musk it would ask the Federal Trade Commission to investigate whether the company’s statements were unfair or deceptive.The scrutiny hasn’t deterred Musk. On Tesla’s support page outlining its referral program, which rewards customers for recommending its cars to others, the company says it “makes the safest cars in the world according to U.S. government testing.” NHTSA specifically tells automakers to avoid using the word “safest” to describe how the agency rates the safety of their vehicles.Model 3’s MarksThe Model 3 is one of 48 vehicles currently sold in the U.S. that have earned IIHS’s top safety accolade. Its standard front-crash prevention sys tem earned a “superior” grade.In the challenging small overlap test, the pillar along the front door hinge caved in toward the driver by 8 inches and the door buckled. Still, IIHS determined drivers face only a moderate risk of lower leg injury from a front-left corner crash.The Model 3 is the third zero-emission vehicles to earn top-pick status this year, after the Audi e-tron electric SUV and the Hyundai Nexo hydrogen fuel cell SUV.“There’s no need to trade away safety for a lower carbon footprint when choosing a vehicle,” David Zuby, IIHS’s chief research officer, said in a statement.\--With assistance from Ryan Beene.To contact the reporter on this story: Chester Dawson in Southfield at cdawson54@bloomberg.netTo contact the editor responsible for this story: Craig Trudell at ctrudell1@bloomberg.netFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • SoftBank Founder’s Empire Is Vulnerable to WeWork Woes

    SoftBank Founder’s Empire Is Vulnerable to WeWork Woes

    (Bloomberg) -- Masayoshi Son, who built a $15.2 billion fortune investing in tech startups like Alibaba Group Holding Ltd., is betting on himself more than ever, even as his empire shows signs of vulnerability.The SoftBank Group Corp. founder has pledged 38% of his stake in the Japanese firm as collateral for personal loans from 19 banks, including Credit Suisse Group AG and Julius Baer Group Ltd., according to a June regulatory filing. That’s up from 36% at the start of the year and triple the level in June 2013.“It lets him monetize a large share of his wealth without foregoing influence over the firm,” said Michael Puleo, assistant professor of finance at Fairfield University’s Dolan School of Business in Connecticut. “But there’s an elevation of crash risk. If the share price falls low enough, he could get a margin call and that could be pretty costly.”The structure highlights the extent of Son’s exposure to SoftBank and its $100 billion Vision Fund. Shares in the Japanese conglomerate have been rocked recently by the postponement of WeWork’s initial public offering. The delay came after the office-rental unicorn was being marketed at a steep discount to the $47 billion figure that the Tokyo-based conglomerate invested at earlier this year. That’s spooked investors, who sent SoftBank’s shares down 5% at one point this week as the listing unraveled, knocking $770 million off Son’s net worth. The stock has still advanced roughly 27% this year.Son, 62, also has leveraged his stake in the Vision Fund, which invests in tech startups. That boosts his returns if things go well, with outsized losses if they don’t. Uber Technologies Inc.’s falling market capitalization and WeWork’s travails are set to dent the 62% return on the fund that SoftBank reported through March.“There is a danger in companies where the founder calls all the shots regardless of whether there are loans,” said Robert Pozen, a senior lecturer with the MIT Sloan School of Management in Boston. “And when founders borrow a lot against their shares, they might be more tempted to make riskier decisions,” he said, adding that borrowing against 5% of one’s stake is usually considered reasonable.Pay OutSoftBank’s compensation plan also involves a lot of debt. Son loaned himself around $3 billion to invest in the first Vision Fund, according to people with knowledge of the matter, who asked not to be identified because the information isn’t public. Using loans for a private investment compounds Son’s risk because he would be less able to bail himself out if things go south, Pozen said.The loan was swapped for equity in the fund and will generate profits when deals make money -- and losses when they don’t. Vision Fund employees, including high-profile bankers and investors, receive base salaries and bonuses, but only get payouts when profits are booked.It’s unclear how much of this compensation will be reported in SoftBank’s next annual report. Son’s pledged shares, which currently have a market value of $9 billion, are excluded from his net worth calculation by the Bloomberg Billionaires Index. SoftBank spokeswoman Hiroe Kotera declined to comment.SoftBank is planning to lend as much as $20 billion to its employees to buy stakes in a second venture capital fund, the people said. Son may account for over half of the employee investment pool, they said.Ellison, MuskPledged shares have become an increasingly common way for founders to unlock the value of a stake without selling shares. Larry Ellison has a history of pledging Oracle Corp. stock to fund a lavish lifestyle, which includes trophy properties, America’s Cup teams and the Indian Wells tennis tournament. About 27% of his Oracle shares -- worth more than $16 billion -- are currently pledged. Elon Musk has pledged about 40% of his stake in Tesla Inc., according to a May 2019 filing.Still, the move comes with risks. “If the price of our common stock were to decline substantially, Mr. Musk may be forced by one or more of the banking institutions to sell shares of Tesla common stock to satisfy his loan obligations if he could not do so through other means. Any such sales could cause the price of our common stock to decline further,” Tesla warns in a filing.The risk-loving Son, who saw $70 billion wiped from his fortune in the dot-com crash, is unlikely to be fazed. He told shareholders at the company’s June meeting that SoftBank’s investment portfolio could grow 33-fold to 200 trillion yen ($1.8 trillion) in 20 years.\--With assistance from Pei Yi Mak, Sonali Basak, Ben Stupples and Venus Feng.To contact the reporters on this story: Giles Turner in London at gturner35@bloomberg.net;Tom Metcalf in London at tmetcalf7@bloomberg.net;Pavel Alpeyev in Tokyo at palpeyev@bloomberg.netTo contact the editors responsible for this story: Pierre Paulden at ppaulden@bloomberg.net, Giles Turner, Steven CrabillFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Tesla (TSLA) Stock Sinks As Market Gains: What You Should Know

    Tesla (TSLA) Stock Sinks As Market Gains: What You Should Know

    Tesla (TSLA) closed at $243.49 in the latest trading session, marking a -0.53% move from the prior day.

  • Tesla takes on Porsche with battle on Germany's toughest circuit

    Tesla takes on Porsche with battle on Germany's toughest circuit

    Tesla wants to steal Porsche's bragging rights by testing its Model S on the northern loop of Germany's Nuerburgring circuit, using a marketing tool that German carmakers have long used to tout the superiority of their products. Germany’s Auto Motor und Sport this week published photographs of a Tesla with "100D+" markings on the track where according to the magazine, it clocked an unofficial time of 7 minutes and 23 seconds, beating the recently launched electric Porsche Taycan's lap time of 7 minutes 42 seconds.

  • Region's first autonomous shuttle service kicks off at Lake Nona
    American City Business Journals

    Region's first autonomous shuttle service kicks off at Lake Nona

    After arriving to Lake Nona in a self-driving, electric shuttle, Orange County Mayor Jerry Demings said the vehicle reminded him of the world of the Jetsons.  “It was all about the future and innovation: autonomous vehicles, flying vehicles,” Demings said. “Perhaps we’ll get to that point where we’re all in flying vehicles one day.”  Demings, Orlando Mayor Buddy Dyer and other public officials and executives received a look at Lake Nona’s new autonomous shuttle service at a launch event on Sept. 18. The event preceded the official start of service for Lake Nona residents on the evening of Sept. 18.

  • Tesla Stock: Capital Structure Analysis

    Tesla Stock: Capital Structure Analysis

    Learn why Tesla’s capital structure may be working against its ability to continue to raise funds for its electric vehicle expansion .

  • Tesla Is the Ferrari of EVs — And That’s Not Good for TSLA Stock

    Tesla Is the Ferrari of EVs — And That’s Not Good for TSLA Stock

    Like most American males, I love cars. I may not know much about them, but I love driving fast (in accordance with local and state laws, of course). And Tesla (NASDAQ:TSLA) is one of those rare companies that has combined multiple technologies into one cohesive whole. In the past, this has supported a wild upswing in TSLA stock.Source: franz12 / Shutterstock.com Better yet for car enthusiasts, Tesla has never stopped innovating. Recently, the iconic sports-car manufacturer Porsche (OTCMKTS:POAHY) made waves with its Taycan electric vehicle. Recently, a Porsche Taycan Turbo lapped Germany's famous Nurburgring track with a time of 7:42. In doing so, the automaker set a lap record for a production electric vehicle.If you've seen the undulating curves and corners of the Nurburgring, you know that anything under an eight-minute lap time is wicked fast. Not to be outdone, Tesla ran its latest Model S around the same track. Unofficially, the S completed a full cycle 20 seconds faster than the Taycan. And if that's a truly legitimate time, Tesla stock deserves an upgrade just on the improved performance alone.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIn the world of auto racing, a hundredth of a second may represent the difference between victory and defeat. When you're talking about 20 seconds in this context, it's a different dimension. Again, in theory, this should lift the TSLA stock convincingly. * 7 Momentum Stocks to Buy On the Dip After all, look at Ferrari (NYSE:RACE). Its business is entirely based on performance and sex appeal.But Tesla is no Ferrari. Clearly, it's best suited for being an EV supercar manufacturer, yet it insists on being a "regular" automaker. Unfortunately, this confusing message hurts Tesla stock in the long run. TSLA Has Ferrari-esque Running CostsAlthough not apparently a priority, Tesla is nevertheless working hard on its uber-cool Roadster. A true supercar, the company claims it will hit 60 miles per hour from a standstill in 1.9 seconds.That's the kind of outrageous statistic that gets people excited about Tesla, and perhaps TSLA stock. For context, Ferrari's 812 Superfast -- that is unfortunately its real name -- hits 60 one second slower. As I mentioned up top, one second is an eternity.Thus, with the EV platform, Tesla has not only matched the competition in terms of streetlight-to-acceleration, it has utterly dominated its fossil-fueled exotic peers. However, it's proven performance won't do much for Tesla stock. That's because TSLA insists on providing a comprehensive product portfolio.On the surface, I'm okay with that. For instance, Toyota (NYSE:TM) has found great success building reliable every-man cars. At the same time, it has ventured into the luxury and performance categories with its Lexus brand.But the difference here is that Toyota -- aside from the larger scale -- has a cohesive strategy. In other words, it's not like Tesla, trying to peddle deceptively expensive cars to middle-class drivers. The hidden expenses of owning even the "entry level" Model 3 represents a longer-term risk for TSLA stock.While EVs undeniably appeal to the techie crowd, they also have multiple liabilities. Specific to Tesla, its EVs are expensive to insure: Essentially, it's on par with insuring a Porsche 911.And why is protecting your Tesla so onerous? To put it simply, Teslas basically are the Ferraris of EVs, but it doesn't want to admit that. Because of their exotic technology and parts, they're very expensive to repair.As such, they should only be marketed to the affluent. Anyone who blinks at $10,000 or higher repair bills shouldn't drive these things. TSLA Stock Faces Risks from Eroding Consumer BaseI wasn't kidding about the $10,000, either. One unfortunate Tesla driver documented his nightmare story of a fairly typical fender-bender accident. After being rear-ended by an SUV, he received a final bill for the damage totaling nearly $36,000.From the pictures the driver shared, I think we can all agree that the damage is not worth the cost of an entry level Mercedes Benz model. And from what other Tesla drivers shared, these are not necessarily atypical expenses.Again, this is because Teslas are exotic cars masquerading as normal ones. While the average consumer is initially wowed, more people eventually will catch on. When they do, they probably won't want to deal with EVs and their (expensive) quirks.Instead, they'll go back to the trusty internal combustion engine. Yeah, it's loud and environmentally unfriendly. But when you're facing a $36,000 repair bill, any alternative is a better alternative. And that really doesn't bode well for Tesla stock.As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Momentum Stocks to Buy On the Dip * 7 Dow Titans Breaking Higher * 5 Growth Stocks to Sell as Rates Move Higher The post Tesla Is the Ferrari of EVs -- And Thata€™s Not Good for TSLA Stock appeared first on InvestorPlace.

  • Auto Stocks: Values or Traps?

    Auto Stocks: Values or Traps?

    The auto stocks sure look cheap but with the global economy slowing and GM workers on strike, is it a fake out?

  • WeWork’s Failed IPO: What’s Really Worrying Investors
    Market Realist

    WeWork’s Failed IPO: What’s Really Worrying Investors

    The We Company has pulled the plug on WeWork’s IPO. Are prospective investors worried that Adam Neumann will end up being another Elon Musk?

  • Believe It or Not, Nio Stock Still Has a Good Chance to Move Higher

    Believe It or Not, Nio Stock Still Has a Good Chance to Move Higher

    Although shares of Nio Inc. (NYSE:NIO) showed a "double bottom" on the charts at around $2.50, the company is not yet out of the woods. Nio issued $200 million worth of convertible notes to bolster its cash on hand. It also cut its workforce to align costs with demand. Investors are well aware now that Nio stock is not the "Tesla (NASDAQ:TSLA) of China." It still has more to prove to win over investor confidence.Source: Sundry Photography / Shutterstock.com On Sept. 5, Nio announced a private placement with an affiliate of Tencent, worth $200 million. The first tranche is due in 360 days and will cost the company 2%. Its conversion price is $2.98 per ADS. The second tranche is due in three years and has a conversion price of $2.98 per ADS of Nio stock. Nio's stock price responded positively in the last week, rising 7.7%.Getting Tencent's support is a positive development. The company has the connections and the retail channel to help Nio build its branding, should Nio need it. Financially, getting the extra $200 million will give the EV maker the resources it needs to mass-produce its ES6 and ES8. Nio has an excellent product with good interior, technology and speed. It is as good, if not better than a Tesla vehicle. But at its current size, Nio will have trouble reaching a wider market. So, the extra cash on hand will help the company build positive momentum on sales.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Defense Stocks to Buy During Rising Geopolitical Tensions Nio Cuts StaffTo align demand with costs and supply, Nio reportedly cut 1,200 staff. A company representative noted that the job reduction will have little impact on core operations. Maintaining R&D and user services staff levels is critical for Nio's future success. It needs to stay ahead, offering the best technology available in its line of EVs. In the last few months, Nio closed retail stores and aligned its pop-up store model. By cutting retail floor costs, it may re-align its efforts on servicing its customers and keeping them content. Satisfied customers may help future sales, as their praise may spread throughout the region, lifting Nio EV sales. Investor Caution HeightenedNio stock is not the only under-performer. Tesla headed back to the $210 - $220 range in August and only recently started rebounding. Nio shares gained momentum in September, helped by hints that the U.S. and China trade war will not escalate. Sadly, much of the trading action in Nio stock and China-based stocks depend on the prospects of a trade war resolution. But chances are good that neither firm will agree on anything, so investors will need to navigate around rumors.Nio is still a very young company whose valuations are unclear at this time. Investors who buy this stock need to hold this stock for a few years. Those who question the company's solvency should not invest in it at all. But others who are looking for a strong EV player in China may want to accumulate a small position at current levels.Investors need to discount Nio's rise to the $10 range when 60 Minutes featured the company back in February. With the hype fully discounted, chances are good that the stock trades at fair value. * 7 Fantastic Fidelity Funds for a Range of Investors Price Target and Your TakeawayInvestors may choose to forecast their revenue expectations for Nio over the next decade. In a 10-year, DCF Revenue Exit model, annual revenue growth in the low double-digits suggests a fair value that is three-fold above the $3.21 closing price (around $12, per finbox.io).Nio is a highly speculative bet but whose strong potential as a leading EV seller in China cannot be ignored. Ideally, the U.S. and China forge a trade deal that brightens the economic mood in China. If trade tensions ease for the next few months, expect Nio to report sales that exceed expectations.As of this writing, Chris Lau did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 CBD Stocks to Buy That Are Still Worth Your Investment Dollars * 5 Stocks to Buy With Great Charts * 5 Goldman Sachs Stocks to Buy with Over 20% Upside Potential The post Believe It or Not, Nio Stock Still Has a Good Chance to Move Higher appeared first on InvestorPlace.

  • Tesla Turnaround Catalysts: China and Model Y Progress
    Market Realist

    Tesla Turnaround Catalysts: China and Model Y Progress

    Tesla (TSLA) stock has tanked over 26% year-to-date as of September 17. Let's look at some catalysts that could help it make a turnaround.

  • Automakers’ Growth Outlook: F, TSLA, GM, FCAU, and RACE
    Market Realist

    Automakers’ Growth Outlook: F, TSLA, GM, FCAU, and RACE

    Automaker stocks have seen mixed performances in September. While Ford, General Motors, Tesla, and Fiat Chrysler have risen, Ferrari has declined.

  • Junk Bond Market Signals WeWork to Look Elsewhere for New Cash

    Junk Bond Market Signals WeWork to Look Elsewhere for New Cash

    (Bloomberg) -- WeWork has an ambition to copy Netflix in one regard: sell junk bonds -- lots of them -- to fund its expansive growth plans.Netflix Inc., and a small group of other unprofitable companies such as Uber Technologies Inc., have managed to become darlings of the high-yield market even though they’re burning through cash.But for now, bond investors are signaling to WeWork that coming back to the high-yield credit market would be costly. And that could present a major challenge to the office-sharing company’s expansion hopes now that its initial public offering is on hold until at least October.The market’s verdict was delivered Tuesday morning when WeWork’s bonds sunk the most on record. Yields shot up to 8.5%. That’s around a percentage point more than a comparable offering from even lower-rated Tesla Inc.The IPO delay has left investors guessing where WeWork might turn for much-needed cash, short of another injection from backer Softbank Group Corp. WeWork was seeking to raise more than $3 billion in the IPO, and has another $6 billion in credit financing lined up if the offering was successful.But in the face of widespread concern over its financial model, the company’s valuation has plummeted, to $15 billion or less. That will make any new debt taken on by WeWork all that more riskier, said Arnold Kakuda, a senior credit analyst at Bloomberg Intelligence.“If they continue to grow, they’re going to need more and more financing,” Kakuda said. “There’s risk if this market capitalization is so low and yet they have so much debt.”WeWork’s $669 million of junk-rated bonds due in 2025 dropped as much as 7.3 cents on the dollar to 95.5 cents Tuesday in New York, according to the Trace bond-price reporting system. They’ve since pared back some of those losses to trade around 97 cents on the dollar.Riskier CreditAt current levels, the market prices WeWork’s debt between the B and CCC ratings tiers. Both Fitch Ratings and S&P Global Ratings give the debt B range grades. Compared to Netflix, which is rated a tier higher, with the third-highest junk grade from ratings companies, it’s a riskier credit.The potential problem for WeWork is that companies with riskier credit ratings -- or those that trade in line with them -- can have trouble maintaining regular access to the credit markets. In times of turbulence, investors typically cut those companies off first. Less than 10% of new junk bonds this year have been sold by CCC rated companies. (Uber has found success selling bonds that carry a CCC+ grade from S&P.)Read more from Bloomberg Intelligence: WeWork: Potential Early Redemption For BondsVicki Bryan, chief executive officer of Bond Angle, a high-yield credit research company, said in a report Tuesday that she could still see WeWork issuing more junk bonds, given how hungry investors are for yield in a world with $13.8 trillion of debt with negative interest rates. But she’s skeptical that the debt would be a good buy.“Just because the company needs fresh cash, pronto, doesn’t mean it’s a good idea for investors to oblige,” Bryan wrote. “Upside potential is limited at best versus downside risk.”She recommended selling the bonds at their Monday level of about 102.8 cents on the dollar, saying the bonds could plunge 10 to 15 cents if the company falters further.If the IPO fails, WeWork’s best back-up plan to keep growing might be more cash from Softbank Group, Kakuda said. The Japanese telecom giant made its last investment in WeWork, renamed We Co., at a valuation of $47 billion and the company and its affiliates hold about 29% of WeWork stock.WeWork has said it could become profitable faster if it slows its expansion plans. But it’s clear the company badly needs cash. S&P Global Ratings has estimated that the company will add 725,000 new desks next year at a cost of about $4.5 billion -- and will likely need to raise cash to fund its 2020 goals.To contact the reporter on this story: Claire Boston in New York at cboston6@bloomberg.netTo contact the editors responsible for this story: Nikolaj Gammeltoft at ngammeltoft@bloomberg.net, Larry Reibstein, Dan WilchinsFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Should You Buy Vegan Stocks & ETF?

    Should You Buy Vegan Stocks & ETF?

    Beyond Meat is one of the hottest IPOs this year and a new ETF aims to capitalize on the trend.

  • Self-Driving Cars: Apple-Backed DiDi Gets a License
    Market Realist

    Self-Driving Cars: Apple-Backed DiDi Gets a License

    Apple-backed DiDi Chuxing has received a license to operate a fleet of self-driving cars on a pilot basis in part of the Jiading district in Shanghai.

  • Can Tesla Stock Investors Trust Elon Musk?

    Can Tesla Stock Investors Trust Elon Musk?

    There's not a stock in the market with a more pitched bull and bear divide than Tesla (NASDAQ:TSLA) stock. Bulls cite a massive growth opportunity -- and a company that can help improve life on Earth. Bears point to the company's lack of profitability, a long list of broken promises and an arguably inflated valuation.Source: Hadrian / Shutterstock.com I've long leaned toward the bearish side of the argument (and taken bearish option positions in the stock, though I'm currently on the sidelines) for one simple reason: I don't trust its management. That concern isn't really based on the arguments over the infamous "funding secured" tweet and the still-lengthening list of broken promises.Rather, it comes down to the fact that auto manufacturing is a notoriously difficult and capital-intensive business. As both TSLA bulls and bears will point out (for very different reasons), among U.S. manufacturers, only Tesla and Ford (NYSE:F) have never gone bankrupt.InvestorPlace - Stock Market News, Stock Advice & Trading TipsYet Tesla, drama aside, has hardly executed well -- or, in my opinion, been managed well. The company announced in late February it was closing all its stores, then reversed field two weeks later. Prices constantly move around. The decision to avoid model years has created issues in parts and services. This is too difficult an industry to not have detailed strategies and top-notch execution.TSLA bulls for the most part have been forgiving, and chosen to put their faith in CEO Elon Musk. At this point, I wonder whether it's still possible to ignore his critics. Do You Believe in Robo-Taxis?At Tesla's Autonomy Day in April, Musk said the company was on its way to fully autonomous driving. He announced that the company would have 1 million "robo-taxis" on the road by the end of 2020.Musk doubled down on that claim on an investor call a little over a week later. He told listeners that in three years existing Tesla models would be worth $150,000-$250,000. In July, that figure came down a bit, but on Twitter Musk still put the value at $100,000-$200,000. * 7 Momentum Stocks to Buy On the Dip So a key question for anyone considering Tesla stock is this: Do you believe those claims?Few do. TSLA stock actually declined 4% in trading on the day of the Autonomy Day (though, to be fair, it regained those losses the following session). Noted TSLA bull Gene Munster of Loup Ventures said in the context of Apple (NASDAQ:AAPL) that "autonomy is going to take longer than people think." Most auto executives believe it will be at least a decade. Autonomy leader Waymo, a unit of Alphabet (NASDAQ:GOOG,NASDAQ:GOOGL), believes it's even further away.In fact, it certainly doesn't seem like Tesla itself believes its CEO. After all, the company is cutting the price of both the Model 3 and the Model Y. Why, exactly, is Tesla selling "appreciating assets," as Musk termed them, for 40% of the company's low estimate of their value? Tesla closed the second quarter with $5 billion in cash. Surely, it could lower deliveries and either sell the cars at a bigger profit or keep them for an in-house fleet.After all, Tesla is guiding for total production of 10,000 units a week by the end of the year. 500,000 units annually at $100,000 each would be worth $50 billion. That's roughly equivalent to Tesla's current enterprise value. What Does That Mean for TSLA Stock?The dubiousness of Musk's claims in turn leads to another question: Can an investor buy Tesla stock if he or she doesn't believe the CEO?Obviously, many investors believe the answer is "yes." Tesla has a large retail shareholder base. Institutions -- and Wall Street analysts -- in many cases have stuck behind the company, and behind TSLA stock.And maybe the opportunity is such that the stock is worth the risk. After all, an investor could plausibly argue that even if Musk is exaggerating, TSLA stock still has upside. If the robo-taxis are worth $50,000 and won't arrive for a few years, that still suggests potentially higher prices down the line.That might be true. But remember: This is a brutally difficult industry. It requires huge amounts of capital (as Tesla has learned). It requires execution and strategy that are on point.And Musk is making what appears to be a ridiculously optimistic claim about something that is a big part of the Tesla business model -- and the bull case for Tesla stock. This isn't random musing about life on Mars. The 1 million robo-taxis by next year claim was made at an event specifically designed to highlight the company's plans in autonomy. It wasn't an off-hand remark made on an earnings call or at a conference.From here, if an investor can't believe that goal, that investor can't, and shouldn't, own Tesla stock. For now, many investors see it differently. That may not be the case forever.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Momentum Stocks to Buy On the Dip * 7 Dow Titans Breaking Higher * 5 Growth Stocks to Sell as Rates Move Higher The post Can Tesla Stock Investors Trust Elon Musk? appeared first on InvestorPlace.

  • Despite New Developments, Nio Stock Makes TSLA Look Stable

    Despite New Developments, Nio Stock Makes TSLA Look Stable

    Nio (NYSE:NIO) stock has seen a nice rebound since the start of September. The Nio stock price has bounced from a low of $2.58 on September 3 to $3.12 at the close September 16. With new financing in place, Nio could hang on as it pursues the path to profitability.Source: xiaorui / Shutterstock.com But is a turnaround realistic?Tesla (NASDAQ:TSLA) will soon open its Shanghai facility. The Chinese EV market is an opportunity, but Nio does not appear to have a clear-cut edge.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Tech Stocks You Should Avoid Now Will the company survive and thrive? The future has yet to be written. But given the valuation of Nio stock, investors should continue to practice caution. Recent Developments With Nio StockWhether you are a Nio stock bull or bear, you can't deny one thing: The company needs cash. Earlier this month, the company raised $200 million via a convertible debt offering. The buyers were Chinese conglomerate Tencent Holdings (OTCMKTS:TCEHY) and Nio's own CEO, William Li. The convertible notes come in two tranches. The first tranche matures within a year, and is convertible at $2.98 per share. The second tranche matures in three, and is convertible at $3.12/share. This successful financing helped to push up the Nio stock price. As I have discussed previously, financing is of big importance to Nio. The company not only loses money on an operating basis, but posts negative gross margins as well. The company is no stranger to convertible debt, raising $650 million last January using convertible notes. But while convertible debt is a cheap, it is dilutive. If NIO does manage to turn itself around, much of the upside will be soaked up by bondholders exercising their conversion rights.The other major morsel of news was the China-U.S. trade talks. The two countries plan to resume high-level trade talks in October. The trade war affects the company, but not in a direct way since its core market is domestic. China's economy continues to cool. The last thing it needs is a trade war that exacerbates these growth concerns. With a slowing economy, EV makers will have a tough time selling their vehicles. With the Chinese government cutting EV subsidies, demand will continue to slack for the company's E6 and E8 vehicles.This means NIO stock's bounce back may be a short lived. While the Nio stock price has fallen ~70% from all-time highs, shares remain overvalued. Competition Makes NIO's Valuation Mind-BogglingNio stock is overvalued. There's no two ways about it. With the company unprofitable, the only usable metric is the enterprise value/sales (EV/Sales) ratio. The stock currently trades at an EV/Sales ratio of 4.2. Compare this to Tesla, which trades at an EV/Sales of 2.2.Why pay a premium when you get get Chinese electric vehicle (EV) exposure with TSLA? Yes, Nio stock is more likely to see parabolic growth due to its size. Tesla is too big to see a 500% or 1000% return if all catalysts play out. But at least Tesla has positive gross margins. Nio continues to sell cars for less than their production cost. Its hard to see how that will play out favorably.Protectionist policies may favor NIO over foreign-owned EV brands like Tesla. But what's to say they have any particular edge over other Chinese companies? There are scores of other automakers making electric vehicles in China. Take a look at this chart of Chinese EV sales in May. The top dogs are BAIC, BYD (OTCMKTS:BYDDF), SAIC, JAC, and Chery. With the exception of BYD, all of these are state-owned enterprises. The state-owned Chinese automakers have the scale and resources to one day build EVs profitably. I could see Nio eventually getting absorbed by one of the state-owned Chinese automakers. Nio already builds its vehicles in a JAC-owned facility.High investor exceptions prop up the Nio stock price. But if more bad news comes out of the company, these speculators could make a run for the exits. Nio Stock Remains a Hard PassThere is too much risk and not enough opportunity with Nio stock. The company's losses require additional capital infusions. Until the next earnings release (on September 24), investors remain in the dark about the company's cash position. But despite these risks, shares remain overvalued. The Nio stock price continues to imply the automaker will be a major player. But there is little to suggest they have an edge against state-owned automakers, or foreign brands such as Tesla.The stock remains a hard pass. While it is possible shares could rally on better-than-expected performance, shares could easily nosedive if results are worse than projected. There is nothing wrong with paying a premium for a company going places. But NIO is not exactly setting the world on fire. * 7 Momentum Stocks to Buy On the Dip Consider opportunities elsewhere, and avoid Nio stock.As of this writing, Thomas Niel did not hold a position in any of the aforementioned securitiesThe post Despite New Developments, Nio Stock Makes TSLA Look Stable appeared first on InvestorPlace.

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  • Tesla (TSLA) Reveals: China and Model Y Are Keys to the Future

    Tesla (TSLA) Reveals: China and Model Y Are Keys to the Future

    Tesla (TSLA) stock has been up and down over the past year -- mostly down (about 17%) for the year, but largely up (about 36%) over the last three months, since the depths plumbed back in early June.The June nadir, by the way, came after a big Q1 loss and fears of waning Model 3 demand sparked a call from CEO Elon Musk to "examine every expenditure at Tesla no matter how small" in an effort to cut costs. But since then, Tesla has had mostly positive news to report, including last quarter's earnings report featuring a near-60% spike in sales.And wouldn't you know it? Tesla thinks the good times are going to keep on rolling.We know this because, in a just-released write-up yesterday detailing the "takeaways" from his meeting with Tesla investor relations head Martin Viecha, Deutsche Bank analyst Emmanuel Rosner reported that Tesla is predicting a "critical turning point" for the company within the next 12 months. As Rosner explains, Tesla's Model 3 business seems to be stabilizing, and its upcoming Model Y crossover vehicle will soon boost profit margins. Meanwhile, the advent of a new production line in China offers Tesla direct access to the world's largest consumer market for electric cars.Here's a quick rundown of what Rosner uncovered:Model 3When first launched in mid-2017, Tesla's Model 3 -- advertised as the $35,000-a-car mass market Tesla -- actually retailed for closer to $55,000 to $60,000 per unit because of all the upgrades customers were ordering (and the fact that Tesla was only selling cars ordered with those pricey upgrades). Now that that initial wave of enthusiasm has passed, though, Tesla average selling prices are drifting lower, to about $50,000 or so as of Q2 2019, on par with the cost of luxury gas-powered small automobiles from Mercedes, Audi, and BMW.Going forward, Tesla anticipates it will be able to hold the line at or about $50,000 for the Model 3, inasmuch as the car offers "fuel savings and superior experience" when compared to competing gas-powered luxury cars. And seeing as Tesla has managed to improve the gross profitability of the car by about 200 basis points year over year already, this promises to prop up Tesla's profits going forward -- especially because the company expects to reap further cost savings from increased production volumes, improved efficiencies of scale, and mass purchases of parts that will be common to both the Model 3 and the upcoming Model Y.Model YSpeaking of which, Tesla is planning to unleash the Model Y on the market in the fall of 2020. In addition to sharing parts with the Model 3, Tesla expects the new electro-buggy to command higher prices because customers generally are willing to pay $4,000 to $5,000 more for an SUV than for a sedan of comparable characteristics -- even though the Model Y's "cost to manufacture will be similar to" that of the Model 3.In other words, the extra $4,000 to $5,000 will be pure profit, falling straight to Tesla's bottom line.ChinaIn Rosner's opinion, the speed at which Tesla is able to start production of the Model Y will be one key to determining "Tesla's 2020 profits and free cash flow." The other key factor in this equation "will depend on how successful the company is in ramping up output at its new Shanghai facility."In that regard, Rosner notes that the new production line in Shanghai has already been cheaper to build and should be cheaper operate than the company's original production line in Fremont "because [Tesla is taking] a simpler approach" in Shanghai. For example, it's using more robots and fewer humans, building on a single floor -- and with 75% fewer assembly steps than Fremont must deal with.Exterior construction on the Shanghai factory was completed last week, and production lines should begin humming before 2019 is out. By mid-next year, the analyst expects Shanghai to be churning out as many as 150,000 Teslas per year, selling them at prices competitive with gas-powered cars, and earning profit margins superior to what Tesla gets in the U.S.Bottom LineGood as all this sounds, however, for the time being, Deutsche Bank believes this good news is priced into Tesla's $243 stock price, and is sticking with its "hold" rating on the stock. (To watch Rosner's track record, click here)The majority of the Street sides with the Deutsche Bank analyst's cautious take on the electric car maker, as TipRanks analytics demonstrate TSLA as a Hold. Out of 28 analysts polled in the last 3 months, 8 are bullish on Tesla stock, 6 remain sidelined, while 14 are bearish on the stock. The average price target among these analysts stands at $241.77, suggesting the stock is fairly valued. (See TSLA's price targets and analyst ratings on TipRanks)Visit TipRanks’ Trending Stocks page, and find out what companies Wall Street’s top analysts are looking at now.