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Let's talk about Tesla, So let's do it. Yeah, so he's obviously extremely bullish, but everybody's not bullish on Tesla. Famed analyst is expecting a steep decline in Tesla stock. According to his estimate, Tesla stock could potentially go down to fifty dollars per share. So wow, that's interesting. So let's let's have a whole, full fledged conversation about Tesla, shall we.
Yes, Marlon, I appreciate you.
Tesla is one of our favorite companies and one of the reasons I don't talk about it is like one of our our star picks in stock Club, but I do love it. The strength is it is a combination of tech and energy combined to one that uses the veneer of automotive to innovate.
I do love the company. I talked about this in Toronto.
The only major concern if I'm looking at the splatter analysis of Tesla is the weaknesses are lack of Elon's focus.
I think that acquisition of Twitter wasn't the best it was.
Bought it for forty four billion, but it's probably worth twenty four to fourteen billion. He has as many kids as Nick Canada, so it's extracurricular activity is a pretty dead UI. But I need the company to focus more. Like if I look at the metrics of the business, the profit margin is fifteen percent, gross margin is twenty five point six percent. Return on equity is twenty one percent. For all the fanfare that they have and all the brand equity that they have, their margins are not big enough.
Like if you look at in Video, which we talk about later, gross margins are fifty seven percent, and that new trip came out, it was about to put some pressure on the market. But I think in the EV space they are hands down the leader Daniel had asked me, is there anybody else that I would invest in the EV space? And hands down, I think the only player in EV is Tesla. So great company, market cap, amazing, revenue ninety five billion, The site truck looks amazing. I
like what they're doing there. They're finally going to roll it out and they also have put in a place of policy where you cannot immediately sell it withinside of a year, so there's some sustainability in that model. I like what they're doing, Like I have a one year target for them at like four hundred and ten bucks. I don't think it will go down to fifty bucks, Like that's too far. I can see it going down
to eighty four. Worst case scenario seventy nine dollars and twenty three cent but to go to fifty impossible, like almost if it does. I would easily park six figures there if it went down to fifty. But it's less than a one percent chance it will ever go that low. But the company needs to focus, needs better leadership, needs to roll out products a lot faster, and they have
to work on those profit margins. I kept saying last year and earlier this year, you cannot be a luxury company and then drop price to scale does not matter. We work tried to do the same thing and they collapsed. And with inflation going up, I think Toyota has a car that's coming out. It's like one hundred and ten grand an suv that looks like the Rose Royce. Yeah, everyone is going to have to move into a higher price market and higher price services a model to be
able to sustain. Like if interest rates are going to continue to be this high, you can't sell base some price because not only are you going to lose market share it's the worst way to compete in business, but also too, you won't be able to have any money to redevelop or invest into the business to make the business and products better.
So I hope they.
Find their way the stock has came down a lot over the last year and a half.
With fifty bucks, is damn the impossible for them to go to.
Yeah, fifty is pretty pretty drastic, But I mean you made a lot of good points for a barecase, right, Like when we talk about interest rates getting longer over a time period, that affects the car sales, but even interest I looked it up, man, The consumer interest has declined for the past six straight quarters.
They were once the number one ranked shop luxury brand.
They have fallen back, particularly the model ass has fallen back ten percent, and shopping consideration, which is something that you have to take into to considertion when you're thinking about what product that you're putting out.
They've also had production decline, right.
We saw over the past quarter, and we talked about that pretty extensively about when you're pricing and tried to get more vehicles bought. But they've spent a lot of time on this cyber truck, and the cyber truck isn't here. In fact, did you talk about you can't buy They actually put a new rule in with the cyber truck that there's a fine if you try to sell it
a year after purchase, so that that's unprecedented. Right like after you buy it, if you try to sell it within twelve months, there is a fifty thousand dollars fine for selling it, which is interesting, smart, pretty smart, but competition. I know that by far the leader in the EV space, definitely here in America, but the base that they have are fine, and to have greater margin, it's China, and evs are being built and companies that are being created and flourishing.
You're talking about having.
Four models or a company like BYD has thirty models, right, and so if you're talking about little prices and more models to choose from, there's competition in that space. Again, they are by far the leader in the space, but competition is there, and so there's a bare case to be spoken of. Fifty dollars is completely drastic, but if we do see a pullback, because I want to look at Tesla and I think about it, Yes, it's more than the EV companies. A tech company obviously disguise is one.
But we know how interest rates have effected tech companies, and there is talks of recession. In twenty twenty four, I was I was hearing some one hundred percent chances over the weekend. These things have to be taken into consideration when we're touching out the future outlook. I always Tesla has always been something that's been volatile, you know, over the pandemics for sure, and so to drop egially, when I saw the question, I thought, a dropping fifty dollars, I'm like, that's not bad.
We've seen it have those type of moves.
But to go down to fifty dollars a year, I think it's a bit much, A bit much.
Who would beat the number one competitor right now? I don't see anybody being like, man, I want the Rivene bad as hell.
I was just good you just I was thinking Rivian. You're seeing them a lot more. They're starting to turn profit with I don't see the demand.
We're seeing production more.
I think the number one competitor is not necessarily one company's every company. You see Mercedes gonna come out with the electric g Wagon. I feel like every coach has every I think I think the competition doesn't come from one particular company I cut. I think it comes from every single company getting into the EV space, where now Tesla has. It's kind of like, you know, the go
to when you think they'd be like band aid. Like when you think of electric car, you think of Tesla, but soon the dangerous part is when you think of electric car, you think of every single car. Yeah, and as eventually as what is going to happen, I don't know how long it'll take.
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Legal alien from Guatemala charged with raping a child in Massachusetts. An MS thirteen gang member from Al Salvador accused of murdering a Texas. Man of Venezuelan charged with filming and selling child pornography in Michigan. These are just some of the heinous migrant criminals caught because of President Donald J.
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Actually, every car will be an electric car at some point in time in the future, right, so that I think long term is the biggest competitor to Tesla's dominance when every single car is the same.
Now, what advantages Tesla have? What's up? Great?
You?
I keep saying they needed to cook, they need they have great leadership there, but they need a operator who is solely focused on the business. I brought this up in Toronto, Like, what do we know about Satia from Microsoft other than the works of Microsoft.
You know, you spoke about Focus, and over the past week, Starlink has been everywhere in the news. Do you think because of the attention that is going there. I mean, you're talking about two different companies that are world changing When you speak about Focus, are you talking about that? Like there there is another thing that he's working on that would be a monster I mean by hisself. I think they said it could ipal by twenty twenty seven
from older reports. I was reading you're talking about multi billion dollar evaluation. Yeah, maybe that's what the focus should be or is that where it's going.
I think Starlin could on the publicly traded side, will probably perform better than Tessa. It's something that's needed. They have a competitive advantage. I don't see anyone in the space coming close to But he's going to have to hunker down and focus on something. I don't think he'll leave that CEO role of Tessa. But Starlink looks like the Star for sure. It looks like Lebron in two thousand and three. It's like, you know this is coming.
We got to figure out how to put Dwan Wagner whoever was playing for Cleveland after the pasture, Darius Miles and somebody like Starlink has to be the focus. I know he has a lot on his plate, but at some point you have to hunker that I'll find way to blend those companies into one, for.
Sure, because if I'm hearing what Shatty's saying, it's like, yeah, it's just some truth to that, right. And we saw states making mandates New York, we know twenty thirty five, California twenty thirty five. Everybody has to have zero emissions. And so if everybody's in the space, what separates me. Is it creating something different inside of Tesla or is it creating an entire new branch of my business? And more, I mean, Starlink is that generational talent that can change.
Things, and the product has to get better for Tesla as well.
Like the people that I know who bought in twenty twenty one, whenever sending me like, hey, I'm underwater in the car because they dropped the price, I'm like, it's not a good feeling.
It's not a good feeling.
But we've all, you know, ran a business and at some point taking our eyes off of something.
But I feel like this is going on for too long with him.
I mean, the stock at one point was that almost thirteen hundred bucks now being the two hundred dollars range.
Insane. Yeah, splits included.
Everybody's been like, oh, wait, well they split.
Yes, yes, of course they split twice. But they split twice.
We've seen and we talked about episode before they split.
When Bezos was in charge.
It never split right to a point where you saw two shares splits in matter of three years.
Yeah, what's the business model Tesla do.
They need to follow or the one they use it now? The one they use it now?
Well, they're selling batteries. The thing that I love on the car side though, is like they sell direct to consumer, so they're way ahead of.
All of their.
Peers, and I think there was a certain cache that came with owning the particularly like the models, but I do like the business model. The thing the only thing I hate in their model is the margins. They have to find a way to get margins up, Like you cannot have your operating margin B eleven percent in your profit margin B fifteen percent. Yes, that's good for a car company, terrible for energy and terrible for a tech company, terrible. I know the cost to hire for those unit comments.
I know that it's.
Hardware, I know fabrication production. I get it.
But they have to find a way to at least not that that margin up to like twenty one to three to like keep their competitor is at Bay.
Which stay done a great job. Four can't catch up. GM is foundering.
The best Mercedes with eqs and a g Wagon will have some impact. Rose Royce now has a Specter will have some impact. But you have to get those margins up, especially if we're going to go into recession.
It is one of those places inside of the chardin stations. We saw the partnership with GM. We've seen it right. So if we can't, it's a good way. If we're gonna create competition, and we know that everybody's coming to the space, well let's control other factors or other areas of the space, i e. Charged stations, i e. Create batteries for these companies and so that they'll always become
a customer. They always be relying on some part of our business to make sure that we always have higher revenue, which.
Is like the B to B version of Apple's app store, which is brilliant. You just need more players in that space and more partnerships like That's why, especially in recession, we touched on this lightly before we started. It's much better to have collaborative partners than to go to war. War is really expensive on us.
You make the arms. You are in the rown business. I know, hit him him up made it a little bit of money.
I don't know any rapper this like thrives off of beefit and dissing.
It costs too much money to do so.
So I think it's brilliant that they have those partnerships in place for the charging stations.
I think they should be more aggressive there.
But I think that leadership team really needs to figure out a way how to bump up that margin by seven to eight percent, because if I don't want to talk about it too much, but when so we were at dinner and Daniel was like, Hey, did you know in Canada the mortgages renew every five years.
I'm like, what the hell you mean?
He was like, yeah, Like you don't have a thirty year three percent rate every five years They'redjust for those of you who don't know, forty one percent of Royal Bank of Canada's mortgages are set to reset in the August of twenty twenty four. Now's not the time to have then margins. They could go through what we went through in a bit short era of two thousand and eight.
Now's not the time to have nine percent or twelve percent margins in your business because you may have to have two years where two years of revenue will have to last you four and a half to make it out of the store.
Hunker down. What do I know? What's your long term projection for Tesla four fifty. I'm not leaving Tesla. If Eli's that we got a shot. We got to shoot a shot. He's a generation of talent and he succeeded at every level.
Until you're still it's still bullesh on Tesla.
Hell yeah, it hasn't left stock club.
If it goes to fifty easy, hundred grands, boll, I would be like I was in Girl Collection at one time. Go ahead, shot to the ballerinas, get all this real quick on Tesla. If it goes to fifty, oh baby, please Jamie Diamond. Michael Burry shorted down in.
Fifty for me, please dah. If it goes to fifty. What does the automotive market look like for the rest of companies? What does the economy look like?
Right? And think about it. That's terrible. Yes, it's judgment day and the machines they hear absolutely.
An illegal alien from Guatemala charged with raping a child in Massachusetts. An MS thirteen gang member from Al Salvador accused of murdering a Texas man of Venezuelan charged with filming and selling child pornography in Michigan. These are just some of the heinous migrant criminals caught because of President Donald J.
Trump's leadership. I'm Christy Noman, the.
United States Secretary of Homeland Security. Under President Trump, attempted illegal border crossings are at the lowest levels ever recorded, and over one hundred thousand illegal aliens have been arrested. If you are here illegally, your next you will be fine nearly one thousand dollars a day, imprisoned and deported.
You will never return.
But if you register using our CBP home app and leave now, you could be allowed to return legally.
Do what's right. Leave now.
Under President Trump, America's laws, border and families will be protected.
Sponsored by the United States Department of Homeland Security,