Once a year, when the reservoir of both financial and automotive market news has been sufficiently replenished, I take time to analyse Tesla (NASDAQ:TSLA) the company and TSLA the stock. This distinction is deliberately dialectic, having observed fundamental discrepancies between the two since 2013. In recent months, the avalanche of news, reports and rumours has grown to an extent that it becomes near impossible to follow each twist in the company’s endgame with sufficient depth.
I am not expounding the CEO’s erratic behaviour at conference calls, his peculiar comportment on Twitter, or other parades of juvenile conduct. I focus on developments in the automotive industry and the performance of the company. Unlike before, I offer an estimate of Q3 2018 results. To begin with, I need to point out two issues related to retail and pension investors’ attitudes towards investing in this company.
First, surprisingly, many investors express a heartfelt conviction that when purchasing this story-stock, they are actively supporting the underlying business and its untested corporate objectives. In the case of Tesla, they believe to support the highly problematic company goal of “accelerating the world’s transition to sustainable energy”, whereas, when purchasing stock on the open market, the proceeds are transferred to the seller of the stock, not to the company that issued the stock in the first place. I have a reasonable suspicion as to why investors act so decidedly irrational, but I leave this field to Seeking Alpha authors who are more capable in detailing behavioural finance issues in our post-factual era.
Second, surprisingly, many investors purchase this story-stock believing that the much-needed paradigm shift towards sustainability is actually under way, where, in fact, quite the contrary is the case, particularly as more consumers in emerging nations rise to the middle class and post-recession consumers in the West keenly open their wallets, consuming and
