After the company’s bumpy first quarter, Tesla’s share price has experienced a dizzying rollercoaster ride. All across financial news media outlets, the narrative surrounding the company continues to feed off of FUD (fear, uncertainty, and doubt). And much of it appears to be echoed by Wall Street analysts who cover the stock. Some influential investors, however, see things differently.
Tesla is what stock market pundits call a “story stock.” But, in fact, there’s more than one story here, and there are several very different reasons to invest, or not invest, in the innovative automaker. Some boosters want to be part of Elon Musk’s bold mission to change the world, while others simply see a company with meteoric growth and fanatical brand loyalty. Some skeptics point to the unlikelihood of a small startup scaling the auto industry’s proverbially punishing barriers to entry, while others just can’t get past Musk’s unconventional personality and snarky tweets.
While this letter was being prepared for publication, Elon Musk released the news that he decided not to follow through on his idea of taking Tesla private. That news made the goal of this letter obsolete. But the arguments in it are as valid today as they were yesterday, making it still worthy of publication.
