I’m not long Tesla Motors or short Tesla Motors. I don’t really care about Tesla Motors, but CNBC and the rest of the Big Swinging Dicks on Wall Street are trying to convince Joe Moron Investor that it’s a can’t miss stock. As you can see from the 3 month chart below, it’s working. The stock has gone from an already overvalued $35 per share to $110 per share. Remember the Dot Com years? New hot companies were touted every day to the ignorant masses. A fool and his money are soon separated. The cult of worship is evident again with Elon Musk, the billionaire CEO of Tesla. His brilliance will lead to riches for investors of Tesla.
I hate to let a few facts get in the way, but I feel I must resort to those dirty old things:
- Tesla has lost $800 million in the last three years.
- The stock has soared due to the $11 million profit they supposedly made in the 1st quarter. The story below reveals how that “profit” was generated.
- It has $450 million of debt and $168 million of equity. (NEGATIVE $1.1 billion of retained earnings).
- Its forward PE ratio (based on estimates) is 112. Google’s PE ratio is 16.
- Its price to sales ratio is 12. Google’s price to sales ratio is 5.
- Its price to book value is 66. Google’s price to book ratio is 4.
Do you think Tesla is slightly overvalued? There are 15 million vehicles sold in the U.S. annually. Tesla’s annual sales are 20,000. That means they have a .13% market share. And they wouldn’t even have this level of sales without the taxpayer footing $7,500 of every sale and the government loaning them millions.
I really don’t care how cool the Tesla cars are. They are run by a billionaire. He can succeed or fail on his own. If enough fools decide to buy his overpriced cars that need to be plugged in, then more power to him. Keep me and my tax dollars out of this green energy scam. This is just another taxpayer and investor boondoggle. My Honda Insight uses far less energy than one of Tesla’s $85,000 green cars.
How Tesla Motors Really Makes Money… From Taxpayers
Posted By Daniel Greenfield On May 28, 2013 @ 9:40 am In The Point | 42 Comments
Tesla’s announcement that it had paid back its government loan made it sound like at least one of Obama’s crony capitalist Green Energy boondoggles was working the way it was supposed to.
Finally at least one green energy company wasn’t drinking the blood of taxpayers in its corporate offices and was actually making money selling things. It was the dawn of a new age.
The latest round of Tesla wonderment came when it reported its first quarterly profit earlier this month. TSLA stock darned near doubled in a week. Musk then borrowed $150 million from Goldman Sachs (shocking!) and floated a cool billion in new stock and long-term debt. That’s how we—the taxpayers—were repaid.
Tesla didn’t generate a profit by selling sexy cars, but rather by selling sleazy emissions “credits,” mandated by the state of California’s electric vehicle requirements. The competition, like Honda, doesn’t have a mass market plug-in to meet the mandate and therefore must buy the credits from Tesla, the only company that does. The bill for last quarter was $68 million.
Absent this shakedown of potential car buyers, Tesla would have lost $57 million, or $11,400 per car. As the company sold 5,000 cars in the quarter, though, $13,600 per car was paid by other manufacturers, who are going to pass at least some of that cost on to buyers of their products. Folks in the new car market are likely paying a bit more than simply the direct tax subsidy.
Tesla isn’t actually making money selling cars. It’s making money from crony capitalist taxes of people who buy cars from other companies. And even the customers who buy its cars get paid with taxpayer money.
First, there’s the $7500 taxback bonus that every buyer gets and every taxpayer pays. Then there are generous state subsidies ($2500 in California, $4000 in Illinois—the bluer the state, the more the taxpayers get gouged), all paid to people forking out $63K (plus taxes) for the base version, to roughly $100K for the really quick one.
Tesla is still turning a profit, not from customers, but from money being seized from taxpayers to compensate its customers for buying Tesla.