Tesla Motors (
), possibly the most innovative and without question the most
in America, was back in the news on Thursday, when the company
finally announced the location - Nevada - of its colossal lithium
battery "Gigafactory." The Street was expecting the shoe to fall,
and many analysts had suggested that Nevada was the front-runner.
Even the announcement that Nevada was giving Tesla an incentive
package worth $1.25 billion over time was in line with
expectation. Still, TSLA stock rose on the announcement, briefly
touching $290 per share, its all-time high.
What the market
expecting was for Tesla's CEO, Elon Musk, to opine, in a question
and answer session, that TSLA's share price was probably too
high. Here is what he said: "I think our stock price is kind of
high right now. If you care about the long term, Tesla, I think
the stock is a good price. If you look at the short term, it is
less clear." Musk also said that when it came to TSLA's share
price, investors have a tendency to "get carried away."
we're talking about! This is the future of man, the un-blighting
of life… surely Musk should be explaining his vision instead of
deriding the stock… or not.
The truth is, Musk doesn't
to pump TSLA stock, and he doesn't really even need to explain
his vision. Apparently, the market already
that vision, because in its absence, the value of TSLA stock is
. To see an investment in TSLA today as being a smart move, one
needs to take a
long ride into the future, over a great deal of still perilous
terrain. It's too much to ask, unless one recognizes that the
destination is inevitable.
The market doesn't usually attempt to be so visionary, and
that makes the market's enthusiasm for TSLA surprising - even
anomalous. This comes, mind you, from a now-and-forever TSLA
bull. It seems like only last year (which it was) when I was
recommending TSLA at $40 per share. As it happens,
still see the value in TSLA at its current price, but I'm a
little surprised that so many other see it. Which others? Morgan
) says TSLA is going to $320;Stifel Nicolaus (
) says $400.
Musk is happy to tell investors today that they are getting
carried away, because he knows very well that the share price
could rise or fall
in the months and years before he successfully realizes his, and
our, shared vision for the company. It's an important point: if
you don't care for volatility, sell your TSLA shares today.
is what Musk's comments mean, and that is all they mean.
If you think Musk's comments indicate that he is becoming less
sure of his vision, you've failed to grasp the
about Tesla that matters. Again.
has been a business writer since the first day of the
twenty-first century, having written for PRA
International and the United Nations Department of
Peacekeeping. He graduated from Davidson College in 1993
and received a Master of Arts in Teaching from Mary
Baldwin College in 2011. He became a stockbroker in 1993,
but now works for Fresh Brewed Media and uses his powers
only for good. You can see closing trades for all
Julian's long and short positions and track his long term
performance via twitter:
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