Betting Against Elon Musk Is a Bad Idea
BUZ INVESTORS Tesla Stock Worth the Hype A lot of people dislike Elon Musk, and I have no idea why. He built four (yes, FOUR) billion-dollar companies in the last 20 years. He revived the space race, changed the car industry, and led an energy revolution. Oh, and he made Tesla Inc (NASDAQ:(TSLA) shareholders rich.
That’s more than most of us could do in ten lifetimes. Yet not a day goes by without some columnist calling Elon Musk “delusional” or “overhyped.”
They even complain that the Tesla stock price is too high, as if Musk can do anything about that. The Tesla stock price is high because the market deemed that a fair price. If it continues to break new highs, it’s because investors vote with their dollars.
Just look at how bank stocks performed since 2009.
Tesla Stock Worth the Hype
It didn’t matter that everyone was screaming bloody murder. The public outcry did nothing to slow down bank stocks, and the same story is true about TSLA stock. No matter how much venom is directed at Elon Musk, the Tesla stock price continues to rise.
Why Tesla Stock Price Surged 120%
Don’t get me wrong: it’s not like Tesla is perfect.
According to The Wall Street Journal, the company missed more deadlines than Tom Brady has Superbowl rings. It’s even fair to say that Elon Musk is responsible for these mistakes. (Source: “Elon Musk Sets Ambitious Goals at Tesla—and Often Falls Short,” The Wall Street Journal, August 15, 2016.)
TSLA Stock Has an Ace Up Its Sleeve
Speaking of crazy Elon Musk promises, you may have heard his strange commitment to the government of South Australia. He promised to fix their energy issues in 100 days.
Stranger still, he made the commitment on Twitter.
Here’s how it went down and, more importantly, why investors should care:
- Massive storms caused blackouts in South Australia.
- Energy infrastructure was damaged, so prices surged.
- Musk’s energy company, SolarCity Corp (NASDAQ:SCTY), offers its batteries to cope with the storage issues.
- Musk reiterates the offer on Twitter, saying it’ll be done within 100 days.
- The Prime Minister of Australia thanks him on Twitter.
If this deal actually goes through, it’ll be a huge win for SolarCity. And since SolarCity is now part of Tesla, it’ll be a big win for TSLA stock.
Should You Buy Tesla Stock?
Investors are sorely under-appreciating this potential. They are obsessed by the upcoming “Model 3” shipments and the electric semi truck that will be unveiled in a few months. I have no idea why those issues take top billing in their minds. Perhaps it’s because Tesla began as a car company.
Nonetheless, it would be foolish to pretend that Tesla is a car company. Tesla is selling solar roofs, solar panels, stackable batteries, electric charging stations, electric cars…the list keeps getting longer. Musk has hinted that Tesla could even get into the factory-building-business.
|Industry:||Autos » Auto Manufacturers NAICS: 336211 SIC: 3711|
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Tesla Inc is a vertically integrated sustainable energy company. It designs, develops, manufactures and sells high-performance fully electric vehicles and electric vehicle powertrain components.
Founded in 2003 and based in Palo Alto, California, Tesla is a vertically integrated sustainable energy company that also aims to transition the world to electric mobility by making electric vehicles. It sells solar panels and solar roofs for energy generation plus batteries for stationary storage for residential and commercial properties including utilities. The Tesla Roadster debuted in 2008, the S in 2012, and the X in 2015. Global deliveries in 2016 were 76,285 units. Tesla went public in 2010 and employs about 30,000 people.