2013–2019: Tesla Sales Jump From ~20,000 Per Year To ~20,000–30,000 Per Month … But Tesla Stock (TSLA) Barely Up

May 23, 20196 years ago Zachary Shahan 0 Comments

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I think anyone who has ever played the stock market has considered it irrational, at least some of the time. When a stock goes in the opposite direction from what you expected, that’s typically the feeling.

Many Tesla [TSLA] shareholders are scratching their heads more than usual lately. I should know — I’m one of them. There are various reasons for this, but I think they’re captured best by a comment from someone from the Tesla Motors Club forum who labels himself/herself/itself “Subhuman.” The first part of that comment is here:

“Let’s put it this way. I bought into TSLA in 2013 around $180 when they were barely able to make 20,000 Model S’s a year.

“Fast forward to today with 400,000 Model S, X and 3 a year, supercharging network, Tesla energy, Gigafactory 1–3, Tesla Semi, Model Y, roadster, pickup, etc.

“There is no way Tesla should be valued the same as 2013.”

I find it hard to disagree with that assessment. You can consider Tesla/TSLA a high-risk investment if you like. After all, it is still growing like gangbusters and faces the risks of growing pains that can come with that. But in 2013 it seems that Tesla was a much higher-risk investment that had barely proven itself. The company is now producing and selling hundreds of thousands of cars a year, has a hugely satisfied customer base, has a vast Supercharging network, has a clear multi-year head start on EV batteries and autonomous hardware & software, and has demonstrated the ability to make a profit. Why is it currently valued at practically the same level as it was on September 27, 2013?

Frankly, as I said, I find it bewildering. Nonetheless, I’ll take a stab at an explanation.

One possibility is that large institutions invested in Tesla back then expected the growth in value that we saw from 2013 to 2018 and then got out of the stock for a time being while waiting for another dramatic growth phase. Another possibility is that they think despite massive sales in recent quarters that sales will soon drop sharply and/or Tesla’s finances are on shaky ground despite the high sales. I consider both assumptions unlikely, but hey, that’s why I hold as many TSLA shares as ever.

One more possibility is basically a psychological one. Anti-Tesla competitors and critics have been slamming the company and its CEO in a long messaging war that has left a stain on the Tesla brand. You can’t easily escape the Tesla smear. The psychological ramifications even seep into the minds of big-time Tesla bulls like Ross Gerber and yours truly, as well as common people who only loosely follow Tesla and know what kind of products it sell.

Getting back to Subhuman, he/she/it summarized on hypothesis like this: “This is Big Oil’s last chance to try and kill Tesla before it gets to the point of no return. Some would argue that we have already reached the point of no return but vested interest have not excepted that yet.”

There are a couple of things to consider with that inference. One is that Big Oil is directly or indirectly funding much of the Tesla smearing you see out there in the media. That’s possible. There are indeed oil-funded Tesla and EV smear campaigns. (This is not debatable.) But how much that drives the narrative is uncertain and is highly debatable.

More interesting to me is what financial firms like Morgan Stanley, Goldman Sachs, and Blackrock are actually doing with regard to Tesla. These companies haven’t exactly become known as good stewards of society. They typically act more like leeches, sucking society’s blood, sometimes to a very dangerous or deadly degree. Some big financial institutions hold large shares of Tesla/TSLA, but the question on many minds is how much more money they have invested in oil companies and larger automakers — and whether those investments influence their “guidance” on Tesla/TSLA. To be clear, I don’t have an answer and don’t presume to have an answer. It is an open question.

There’s another possibility, probably more likely, that is far less conspiratorial. That possibility is that many people simply lack vision and don’t jump into an investment until the company is a long-term, solidified success.

A common company and stock that comes to mind for many Tesla bulls is Amazon, and many of them remember being investors in Amazon when there was so much doom and gloom about the company not making a profit, when loud critics said with confidence that it was massively overhyped and overpriced, and when it was heavily shorted.

If you just take a 5 year snapshot of the company’s stock, as I have above, you can pick out some low points in Amazon’s stock price graph where it might have seemed like the whole growth story was crashing down. Were the shorts right? Did the critics have the story straight all along? Wouldn’t it be smart to bail immediately rather than wait for the stock price to go down to $0 (or $10)?

Well, it’s easy to look at the graph now and think anyone who bought high and sold low was an idiot, but I’m sure many people did — and I’d rather have a performance-based job predicting the past than predicting the future. The graph would look a look scarier for an Amazon investor if you cut it off where one of the orange arrows is pointing.

Is Tesla Amazon? No. Will it be another stock market success story like Amazon? Who knows?

I am definitely not offering any stock-picking advice here. As I stated at the top, I’m bewildered by what seems to be an irrational market right now. That said, I’m also not a massive institutional investor who can move the market with one misleading memo, and who has a million fancy tools to read and ride a stock price roller coaster that is driven more by nonsense than fact. I still think Tesla is going to be a gigantic long-term winner, so I still think it’s the best place for me to store some of my cash until I want to use it for fancy holidays and toys in my 60s or 70s. But that’s just me.

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Zachary Shahan