To The Moon

Tesla's Financial Slip-Up: Stock Soars Against the Odds!

Despite Tesla's first-quarter earnings falling short of expectations, Musk simultaneously unveiled three verbal promises: humanoid robots, autonomous driving, and affordable vehicle models. The market immediately became excited, overlooking the disappointing data in its earnings report, considering Musk's past ambitious claims that Tesla has often delivered on.

Tesla's stock price has been on a rollercoaster ride, exhibiting almost frenzied fluctuations. On April 22nd, it plummeted by 9.73%, only to surge by 12% on the 24th, epitomizing Tesla's 2024 as a year of wild swings. However, as the automotive business undergoes an adjustment period and the next profit-boosting Model 2 is anticipated to offer discounts, the short-term realization of Robotaxi remains uncertain due to regulatory and technological challenges. This highlights the advantages of replacing stock holdings with FCN during such volatile times.

Why is it said that FCN bonds are more suitable for replacing stock holdings?

FCN is an instrument that regularly pay fixed coupon to investors. Within the product's term, investors receive fixed coupon payments regularly. At maturity, investors can redeem the principal and coupon or subscribe to corresponding stocks at the strike price.

The main advantage of FCN lies in its stability. Regardless of whether the market is rising, falling, or fluctuating, investors can receive stable fixed coupon payments until the product is terminated or matures. Compared to stocks, FCN provides investors with fixed cash dividends every month and offers protection during market downturns.

Compared to snowball products, FCN ensures fixed coupon income every month regardless of whether it is knocked in or not. Even if it is knocked in at maturity, investors only need to bear the loss between the strike price and the maturity price, while the fixed interest earned during this period forms a safety cushion.

Compared to stocks, FCN provides an additional layer of protection, and compared to snowball products, it provides an additional layer of protection at the exercise price and a stable fixed interest protection layer. So how high is the annualized return of such a strong FCN? According to two months of quoted data collected, linked to Tesla $特斯拉(TSLA)$ , 3Months, 100% knock-out price, 80% strike price, from the annualized coupon, it can be seen that FCN simultaneously combines stability and profitability. Isn't this stronger than holding stocks directly in turbulent times?

Using the latest quote as an example, with Tesla as the underlying stock, a 3-month term, period-end observation, a knock-out price of 100%, and a strike price of 80%, the annualized coupon of FCN bonds is 18.34%.

If the stock price remains above $129.70, investors can enjoy an annualized yield of 18.34%. However, in the event of a significant stock price decline, investors have the opportunity to acquire the stock at a 20% discount to the current price, fully embodying the core function of FCN, which is "buy stock low and earn interest high".