Timing is paramount for TSLA and Elon right now.
The key date for the immediate future is March 1 when $920M of convertible debt is due. Elon has already mentioned in interviews that prior to scaling up Model 3 productions, TSLA was single digit weeks away from filing bankruptcy. Although Elon has bought some time, this scenario is most likely to return. The balance sheet with 7.9B in current assets and 9.7B in current liabilities is a testament to the prior claim. Furthermore, 3.3B of its CA are in inventory which has come under scrutiny recently with heavy delays in registration of sold vehicles with the DMV, possibly indicating some foul play and inflation of the inventory numbers. Running out of cash might come sooner than later if the CA are indeed inflated, which is a real possibility as Elon plays fast and loose and the musical chair that has become the CFO position at TSLA.
If the price of the stock reaches $359.86 by March 1, TSLA can pay the $920M in stocks, which would be a godsend and likely one of Elon's highest priorities at the moment. The current price range of $347 is not too far off, but to sustain this price level for over a month and a half is highly unlikely. I expect TSLA to go into a downtrend until Feb 6 when TSLA will report its earnings. From there I expect extremely high volatility with heavy news coming from both TSLA and shorts. Elon will pull all the stops to initiate and maintain a bull run for that one month period into March. In the end I expect new highs days prior to March 1, giving TSLA some room for error.
However this problem will likely resurface and a long term solution has to be found. TLSA has the potential to be one of the world's most valuable company if it can survive its days as a car manufacturer and transition into the businesses of Transportation as a Service, Software as a Service and energy. Its valuation of 60B is paltry compared to what it can become if these future business opportunities come to fruition. Having said that TSLA needs a huge cash infusion or go private to weather its early stages as a car manufacturer.
LONG TERM FUTURE OPINION
I believe that GOOGLE will be a prime candidate to acquire a large stake. There's been rumors of sovereign national funds of purchasing a large stake, but I don't see a nation willing to play the long game with TSLA. Saudi's need cash flow NOW or in the near future and Norway is too risk averse to make an investment in TSLA. APPL has cash, but what APPL can offer, other than cash, TSLA already has. TSLA already has a cult following, great design and a visionary CEO. GOOGLE with its ability to process and monetize data will be a good fit for TSLA whose entire vehicle fleet have been collecting data since its inception. GOOGLE has been developing its self driving software and its no secret Elon has sleepovers at Larry Page's house. GOOGLE has the patience and the pockets to see TSLA to its potential. Furthermore, TSLA will be able to offer GOOGLE a tangible product and a physical presence that is lacks.
The key date for the immediate future is March 1 when $920M of convertible debt is due. Elon has already mentioned in interviews that prior to scaling up Model 3 productions, TSLA was single digit weeks away from filing bankruptcy. Although Elon has bought some time, this scenario is most likely to return. The balance sheet with 7.9B in current assets and 9.7B in current liabilities is a testament to the prior claim. Furthermore, 3.3B of its CA are in inventory which has come under scrutiny recently with heavy delays in registration of sold vehicles with the DMV, possibly indicating some foul play and inflation of the inventory numbers. Running out of cash might come sooner than later if the CA are indeed inflated, which is a real possibility as Elon plays fast and loose and the musical chair that has become the CFO position at TSLA.
If the price of the stock reaches $359.86 by March 1, TSLA can pay the $920M in stocks, which would be a godsend and likely one of Elon's highest priorities at the moment. The current price range of $347 is not too far off, but to sustain this price level for over a month and a half is highly unlikely. I expect TSLA to go into a downtrend until Feb 6 when TSLA will report its earnings. From there I expect extremely high volatility with heavy news coming from both TSLA and shorts. Elon will pull all the stops to initiate and maintain a bull run for that one month period into March. In the end I expect new highs days prior to March 1, giving TSLA some room for error.
However this problem will likely resurface and a long term solution has to be found. TLSA has the potential to be one of the world's most valuable company if it can survive its days as a car manufacturer and transition into the businesses of Transportation as a Service, Software as a Service and energy. Its valuation of 60B is paltry compared to what it can become if these future business opportunities come to fruition. Having said that TSLA needs a huge cash infusion or go private to weather its early stages as a car manufacturer.
LONG TERM FUTURE OPINION
I believe that GOOGLE will be a prime candidate to acquire a large stake. There's been rumors of sovereign national funds of purchasing a large stake, but I don't see a nation willing to play the long game with TSLA. Saudi's need cash flow NOW or in the near future and Norway is too risk averse to make an investment in TSLA. APPL has cash, but what APPL can offer, other than cash, TSLA already has. TSLA already has a cult following, great design and a visionary CEO. GOOGLE with its ability to process and monetize data will be a good fit for TSLA whose entire vehicle fleet have been collecting data since its inception. GOOGLE has been developing its self driving software and its no secret Elon has sleepovers at Larry Page's house. GOOGLE has the patience and the pockets to see TSLA to its potential. Furthermore, TSLA will be able to offer GOOGLE a tangible product and a physical presence that is lacks.