In an article published by MarketWatch, the author believes that Tesla’s road will be easier from here. This verdict rides on the heels of Wednesday’s market close, in which Tesla reported $150 million in profits in the third quarter of 2019. Analysts were confident that Tesla would be reporting losses. In fact, many critics/short sellers who think Tesla is an imminent failure considered the quarter to perhaps be the beginning of the end, the last nail in the coffin. (It’s Halloween season, we need some seasonal metaphors).
Sure, there may be a few nails, but there is no coffin — not for Tesla. Every time someone says that Tesla will never (insert challenge here), Tesla does it. This just shows that Tesla — not just Elon Musk, but the entire management team there, accepts these challenges and take them head-on. Tesla wins almost every time. One of the major challenges that is mentioned in the article is its capital.
“Tesla Has No Capital”
That is in quotes because it is the mantra of many skeptics and critics who fully believe, in a cult-like fashion, that Tesla is the ultimate failure. They believe this so passionately that they put their money into their beliefs. Much like a religion. You go to church, tithe as much as you can so you can get those blessings. (This is how a lot of religious organizations make their billions.) In the third quarter, Tesla proved the skeptics and critics wrong.
“With estimates of next year’s free-cash-flow running as high as the $1.7 billion projected by Joe Osha of JMP Securities — before the earnings report — Tesla is basically home free on the cash front.” —MarketWatch.
Tesla has capital — end of story. Actually, no, not the end of the story — this is just another sentence in a chapter in Tesla’s story. Yes, Tesla didn’t have this kind of money for 15 years, and many think that this is a bad thing in this business, and it can be if money is your main focus and you are short-term minded. Yes, money is a goal of Tesla’s, but it’s not the goal. Further, Tesla’s whole mission and vision is long term. It’s about bringing 100% sustainable energy closer to today. Years from now, people will look back in awe at Tesla’s story. This is where many analysts get lost.
Many analysts focus on the end result right now. They look at the present numbers, calculate, and make their bets. This is how they lose. People love stories, and this is why many companies do well when they are a part of the story.
Let’s look at another story. I’m an LSU fan. A couple of weeks ago, we played Florida. It was a bit of a nail-biting game that had all of us on the edges of our seats. In fact, this game was the most-watched college football game on ESPN in the past two years. If LSU was Tesla and the viewers of the game were stock analysts, I can assure you every one of these analysts would have bet based off of the first two quarters of the game that LSU would have lost. Why? Because they would have looked at the right now scenario and predicted the future.
In the game, LSU had a very, very weak defense. It was so weak that even some fans were saying they couldn’t watch. LSU has been on a winning streak (8-0), and in that game LSU did what the analysts would not have expected them to do after the first half: LSU beat the Gators 42-28.
“The engineers of the future will be poets.” —Terence McKenna
Now replace LSU with Tesla. Tesla isn’t playing football, but the scenario is very similar. Here we have a team, per se, whose story (the game) will determine its ultimate fate. It’s the story, and until that story is over, we can’t say who wins or lose. This is why the analysts are stunned. They refuse to open the book and read the story. They don’t understand why Tesla is popular, well loved, profitable — and this is why they assume Tesla fans are a cult.
Tesla’s Road Is Its Story
Tesla’s road will be a bit easier than it has been according to the MarketWatch article. I agree. However, Tesla will still have its critics, simply because some of them are fueled by an intense hatred for Elon Musk. It’s sort of like those stories we grew up reading and watching as children: we have the good guys and the evil ones. I wouldn’t go as far as to say the people who hate Elon are evil, but I will say that the type of hatred they display shows just how much they need help. It’s not healthy to hate someone in this manner.
Tesla’s road is its story, and as that story continues to unfold, chapter by chapter, many will take each chapter in with delight. The Model 3, Model Y, Solar Glass, Powerwall, Model S, both Roadsters, the Pickup — all of these are chapters in Tesla’s story.
Featured image via Tesla Shuttle