(May 2013, This was supposed to be my first article in July 2012, but was rejected by SA for some odd reasons. It is funny, how they allow many average articles to be written.)
There seems to be great debate regarding the success or fail for Tesla Motors. One side seems right that the "current battery technology and strategy" will cause Tesla to fail. The other side feels strongly that, "Elon Musk, CEO of Tesla, and his team" will succeed in making Tesla Motors a great carmaker. Who is right?, Only time will tell or maybe not? (As there has been so much said on Tesla, I will keep this short.)
As a concerned shareholder, I attended the recent shareholder meeting on June 6, 2012. There was good talk about company achievements and where the industry is going. I sensed no concern, only confidence from Elon Musk and the executives. (After the meeting, I felt compelled to write something, so I am sorry for the delay.) During the questions period, I asked Elon Musk about the Model S sales, it got to the point where I asked, "What if you sell only 10k?" (Model S), In which he replied, "8K is breakeven." http://www.teslamotors.com/2012shareholdermeeting
- (Minute 45:00) / www.sfgate.com/default/article/Tesla-s-M...
Once I heard that, I was less concerned. Today, after the unveiling a month ago and good reviews, I see no reason why they can't sell at least 8K cars. I remember when I asked him the question, he seemed bit annoyed. If that is the case, then I have nothing to worry about. I am an entrepreneur as well. I know what it is like to be criticized. I have no problem giving him my $10K or $10M dollars to invest with and you shouldn't either.
There has been so much back and forth on Tesla, I find it annoying. So I just sit back and let the business take shape. That's what Tesla is, a business. If Elon says he can get it done, then I believe Him. I believe Tesla management is fully aware of the risks.
I own both shares and options. The options will eventually be closed out, as I focus more on investment management, then investment trading. I would recommend TSLA as no more than 20% of your portfolio. TSLA is in the investment model I am currently building.
If I were an analyst, I would rate Tesla Motors a "Buy" at the $30 price range. I see more positives, then negatives. I make this "buy call" before the Q2 earnings release this Wednesday, July 25, 2012. I believe Musk is annoyed with the negative analyst's press, to come out early with the results (truth).
Thanks, Roy Philipose
Disclosure: I am long TSLA.