{"id":868,"date":"2018-09-10T05:50:55","date_gmt":"2018-09-10T05:50:55","guid":{"rendered":"https:\/\/www.antya.ca\/research\/tesla-inc-quantitative-succor-for-ethical-ineptitude\/"},"modified":"2026-02-17T06:27:30","modified_gmt":"2026-02-17T06:27:30","slug":"tesla-inc-quantitative-succor-for-ethical-ineptitude","status":"publish","type":"post","link":"https:\/\/www.antya.ca\/research\/tesla-inc-quantitative-succor-for-ethical-ineptitude\/","title":{"rendered":"Tesla Inc. \u2013 Quantitative Succor for Ethical Ineptitude"},"content":{"rendered":"
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For rational investors, at the current valuation, Tesla Motors (TSLA US) presents an unparalleled chance to buy a large capitalisation growth stock with an addressable market of hundreds of billions of dollars. Tesla will likely capture a significant share of the transportation industry profit pool going forward. While traditional automakers play the BCG matrix to reposition the product portfolio, Tesla offers a pure, unencumbered play on green energy, electric vehicles and China: all rolled into one.<\/p>\n<\/div><\/div>\n<\/div>\n

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Elon Musk (\u201cMusk\u201d), the chief evangelist for Tesla Motors (TSLA US) ( \u201cTesla\u201d or the \u201cCompany\u201d) took one puff of marijuana on youtube, and all hell broke loose. For the uninitiated, marijuana use is legal in California and many other U.S. States, although federally in the U.S., it is still a controlled substance. Marijuana is already legal in Canada for medicinal purposes, and will also become legal for recreational use beginning October 17, 2018. It is interesting indeed that all this furor surrounding Musk\u2019s usage of a substance on the verge of being widely accepted is similar to electric cars becoming widely accessible and adequate as a mode of transportation. Not to suggest that the high of the Ludicrous mode in a Tesla X P100D is the same as the high attained by Bob Marley while recording Kaya!<\/p>\n

Nonetheless, placing the infamous inhaling of Kaya, alongside the now very public failure of a going private transaction at a suggested stock price of $420\/share (wink-wink nod-nod), gives credence to bearish folklore of an unhinged CEO, and allows haters to continue to pound the table on the coming demise of Tesla. So what\u2019s a rational investor to do? In ANTYA\u2019s view, Investors with the fortitude to withstand the gut-wrenching volatility of owning a stock with the possibility of changing the career trajectory forever, i.e. hero to zero or vice-versa, need to look beyond the glaring and misplaced media headlines and hunker down.<\/p>\n

We have been bearish on many media darlings in the past, and in every instance, the company imploded within two or three years, because of one of the following reasons outlined below, or in some unfortunate instances multiple reasons coming together at the same time. This is the first time we are in the midst of a battle where a majority are bearish, while we retain our bullish stance. It will be interesting to see who ends on the tombstone on this one. Coming back to fallen angels of yore:<\/p>\n

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  1. Related party dealings are hidden from public view, e.g. Valeant Pharmaceuticals Inc.<\/li>\n<\/ol>\n
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    1. Aggressive accounting is masking M&A-driven growth masquerading as organic performance, i.e. unreliable financial statements, e.g. Yellow Pages Income Fund, Valeant Pharmaceuticals Inc.<\/li>\n<\/ol>\n
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      1. Hiding the secular downturn in business using aggressive accounting, e.g. Nortel Networks Inc. and Yellow Pages Income Fund<\/li>\n<\/ol>\n
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        1. Using unproven technology to de-risk business,e. g. MDS Inc.<\/li>\n<\/ol>\n

          We could list 100 other instances, but discourse is not what investors require of us. Investors in Tesla will agree with the following facts:<\/p>\n