To The Moon

$Tesla Motors(TSLA)$ 

Tesla's share price has been falling drastically recently ever since its famous CEO Elon Musk acquired Twitter.   On November 9, Tesla's share price was down 7.2% at 177.59, its lowest point since November 2020.  Year to date Tesla is down a massive 51%.

Elon Musk has recently sold USD 3.95 billion of Tesla's shares to fund his Twitter acquisition.  In fact Elon Musk has sold USD 36 billion worth of Tesla's shares.  I believe that investors worry that Elon Musk may be selling more Tesla's shares to fund his Twitter acquisition.  It is like selling caviar to buy pizza. 

Investors are also worried that Elon Musk may devote more of his time to Twitter and neglect Tesla.  This is certainly a valid  concern as Twitter is losing revenue from advertising.  According to Elon Musk Twitter is losing USD 4 million a day as many advertisers are currently pausing advertising with Twitter.  More importantly Elon Musk said that Twitter  could go bankrupt if it continues to lose revenue and Elon Musk may have to bail out Twitter by selling more of his Tesla's shares. 

If that is not enough bad news, Elon Musk is heading to Court on  November 14 to defend his Tesla USD 56 million dollar package from a disgruntled shareholder. 

Recently there has been a recall of 40,000 Tesla Vehicles made in 2017 to 2021 Model S and Model Y due to a possible loss of steering power.   In China, there is an ongoing investigation of a Tesla's EV crashing with the loss of 2 lives.  At the heart of the investigation is the question on the brakes of the EV. 

Tesla is also facing macro headwinds of high inflation, rising interest rates, slowing global economy and a strong US dollar.   There is also intense competition from other EV manufacturers too. 

Nonetheless Tesla has several products in the pipeline that will rev up its revenue.  The first   Semitruck delivery to Pepsi is due on 1 December this year.  Cyber truck is due for release in 2023, robotaxi in 2024 and human robot Optimus in 2023.  Full Self Drive Beta is due to be released in the US also in December 2022.

Tesla is a profitable company with a strong balance sheet.  It has generated USD 3 billion free cash flow in Q322, bringing a total of USD 9 billion.  Elon Musk also said that Tesla will embark on a share buyback program in 2023.  This will bring more value to Tesla's shareholders and bump up Tesla's falling share price. 

Tesla is a compelling buy at its current share price which is half price from its high as I believe that Tesla's growth story is not over by a long shot.  

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