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New Developments For Tesla

Jul. 12, 2020 3:36 PM ETTesla, Inc. (TSLA)SP5004 Comments
Ruerd Heeg profile picture
Ruerd Heeg's Blog
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Deep Value, Foreign Companies, Nano-cap, Long Only

Seeking Alpha Analyst Since 2012

As a mathematician (Ph.D.) I use 7 quantitative strategies with statistically extremely high returns. I select these cheap companies with software comparing thousands of global stocks on value metrics, liquidity, quality metrics, and momentum. I focus on global nanocaps and net-nets. Check Turning Rough Stones: turningroughstones.substack.com

A couple of days ago I wrote why it is unlikely Tesla (TSLA) will get added to the S&P 500 (SP500). See also this new thread on Twitter explaining this again with a couple of extra reasons. I find the idea that S&P rates Tesla debt as junk and the same organisation includes the stock in its prestigious S&P 500 index entertaining. Another extra reason for the committee to postpone addition is the basic/core operations of Tesla are still not profitable. That is, excluding earnings from selling regulatory credits Tesla is not profitable. It makes sense to exclude such earnings. They will sharply decrease when other manufacturers will also start selling electrical cars.

A note on the European deliveries: Tesla delivered about 14,000 cars in the EU. It has been reported Tesla still self-registers cars. For example in Norway. See here. See also here. This is extremely suspicious!

Tesla apparently sold 15k cars in China in June 2020. I think it sold about 30k cars during the second quarter of 2020 in China. It has been reported production in June was 200 cars per day lower than in May, before the Chinese factory was suspended.

With more Teslas on Chinese roads the complaints about poor customer service are on the rise as well. See for example here. Tesla is as quick with damaging its brand in China as in other countries.

Bottom line

In the mean time the stock went up on no real news. My opinion on the stock is still: strong sell.

Analyst's Disclosure: I am/we are short TSLA.

Global Deep Value Stocks is a long only newsletter. I do not discuss stocks like Tesla in Global Deep Value Stocks.

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