STOCK MARKET Thread

[whitev70r]

You can't even if you wanted to ... he's taking it private.

Unless a few years down the road ... he changes his mind and goes public and has an IPO for it. Which I wouldn't put it pass him.

[Hehe]

Originally Posted by Hehe

I am biased af as an owner/shareholder.

But really, if I were to invest into Tesla today, or any company for that matter, what I look is for what kind of future is the company looking to be in, and how far are they from achieving it?

I believe the hardest part for Tesla is behind them. They now have Model3/Y that would serve as their foundation, much like how 3-series paves the way for BMW in term of spreading fixed costs.

The next stage that Tesla is entering is the exponential growth part. This is the same part where AMZN started its many years of money losing trend while revenue continue to climb exponentially. TSLA seems to be managing fine with expenses, so I don't think we'd see the money losing trend like AMZN had to go through, but I'm just saying don't be surprised to see losses as it takes money to make money.

With 2 Gigafactories under construction, 1 (Giga Shanghai) expanding, Tesla is going to easily 3-5x its current production in a year or 2 once everything is completed and operational.

IMO (again, biased af, so do your own dd), with car business alone, by being the leader in EV industry (Tesla got 80% of market share in H12020 for US EV market), it can justify its current valuation and beyond (I give no less than 1T valuation).

And with the recent events in California, we can see that the power infrastructure in even a developed market like California is no match to the global warming/climate change. The reason is that increasing capacity is costly. And they wouldn't build 110% of capacity if the usual load is sub 80%.So, Tesla's battery pack business (both residential and industrial scale) would expand in the next few years.

And if Tesla solves the autonomous driving, sky is the limit for share price.

Anyway, I think in the long term, TSLA has room to grow. Yes... probably won't be the 100x climb from IPO to now... but I expect a decent return too.

Right now, I think the market is too volatile and there'd likely be some profit taking after the split (record date is today, but new price is not until 08/31). Maybe keep an eye on it and if after 08/31 and prior to battery day (09/22 IIRC), there's a dip for profit taking, I'd probably get some shares by then as the battery day suppose to bring some mind blowing stuff.

I'd mark this thread and revisit it if we ever reach 2050 again post-split (5x current valuation)

Revisiting my old post when TSLA announced 5:1 split. It didn't get anywhere close to 2050 post-split. But we made more than half-way (12xx) and if rumor is correct, TSLA will undergo another split. This time, a 20:1 split. Hence revisiting my post.

TSLA has already announced the plan to get shareholders' approval to issue additional shares in this year meeting for split, what we didn't know was the ratio of the split. The latest leak from letters sent to TSLA holders at JPMC say it's 20:1.

A 20:1 means one thing IMO: TSLA wants to have a shot at DJIA inclusion. DJIA being a share price-weighted index would never consider a company with 4 digit SP for inclusion. Another reason, to buy more companies... more on this later.

Going back to my original prediction and I think I was kinda on the right track. Tesla is going through an exponential growth period. And this is going to continue now with Giga Berlin and Austin both being operational. Of course, it's going to take some time for them to iron out any kinks and issues, but from what they learned ramping up Giga Shanghai, I think this period would be a lot shorter and all factories would be reaching their theoretical production limit (before further expansion like Giga SH is doing and Giga Texas having a lot of RE to do so) within the next 5 years.

Beyond that... I believe Elon Musk would eventually merge all his entities under a single conglomerate umbrella a la Alphabet/Google. Using the free cash flow generated by Tesla cars, which is operating at 30% automotive margin, to fund other exciting ventures. (much like how Alphabet use Google ads revenue to fund its other interests).

The reasoning? First, everything they do is actually complementary to each other and there are a LOT of opportunities to explore such as SpaceX metal composition know-how sharing with Cybertruck, TeslaBots to be the first robots on Mars before humans sets foot to buildout basic necessities for SpaceX, Starlink satellite connections for Tesla vehicles, Boring using Tesla to transport people and so much more. They can do that while being separate, as long as they observe the arm-length principle, which might become more of a problem at some point. Thus, becoming a single entity make a lot more sense some time down the road.

Second, Elon just bought Twitter for 44B. He's not getting through this deal by himself, but with a consortium of other investors/firms/banks.
Elon might have a grandiose idea to set Twitter free, but ultimately, these investors would like to see a return on their investments. It leaves 2 options for Elon on Twitter, either merge it with TSLA (investors get TSLA shares in return) or file for IPO again when he finishes re-organizing Twitter. (so investors can get out). The latter option is unlikely as he'd then have to push Twitter out of its control again. Thus, the most logical move would be to incorporate into TSLA as a part of it. While it might sound a lot at 44B, it's nothing when TSLA is at 1T+. This way, Elon can swallow Twitter, while not having to lose much control of his TSLA shares. (he borrows money to buy TWTR, merge with TSLA, gets paid in TSLA shares at whatever the premium, pay off by selling a bit of the now larger share pot)

So, as a TSLA shareholder, I still see an exciting future ahead. Going to keep holding... probably add a bit of position whenever I can afford. But even the merger part doesn't come true, just the fact that we might see TSLA in DJIA, TeslaBots and all the Gigas ramping, it's enough to more than justify its current SP and beyond.

[Hondaracer]

I can’t see how that twitter acquisition is anything but dick wagging.

Twitter had fallen off a cliff not because sensorship but because of the type of user base and the antiquated form of communication. Now because it’s “free speech” and you can restore Joe Rogans conspiracy theories and blatant racism etc. I don’t feel like it’s going to put the company back on track lol..

[Hehe]

To get control of Twitter is to own the direction of narrative. Think how Jeff Bezo bought WaPo

As of today, Twitter is arguably the largest news publishing entity. Every journalist worth their salt is quite active on Twitter as they seek and publish news that goes on around the globe.

A lot of FUD is created given the liberal nature of current Twitter. You seize control of that, by simply eliminating the FUD factor, you can then make sure that narratives are based on facts rather than opinions or purely speculation.

[HonestTea]

I keep seeing the ticker ATER being posted all around Twitter/Reddit etc anyone in? I bought a bit to see what the hypes all about (up 9% right now)

[SiRV]

anyone looking into baba? or tencent? for the china exposure

[Razor Ramon HG]

Originally Posted by HonestTea

I keep seeing the ticker ATER being posted all around Twitter/Reddit etc anyone in? I bought a bit to see what the hypes all about (up 9% right now)

It always comes and goes by pump and dumpers on /r/shortsqueeze

[GGnoRE]

Originally Posted by Hehe

Beyond that... I believe Elon Musk would eventually merge all his entities under a single conglomerate umbrella a la Alphabet/Google. Using the free cash flow generated by Tesla cars, which is operating at 30% automotive margin, to fund other exciting ventures. (much like how Alphabet use Google ads revenue to fund its other interests).

...

Second, Elon just bought Twitter for 44B. He's not getting through this deal by himself, but with a consortium of other investors/firms/banks.
Elon might have a grandiose idea to set Twitter free, but ultimately, these investors would like to see a return on their investments. It leaves 2 options for Elon on Twitter, either merge it with TSLA (investors get TSLA shares in return) or file for IPO again when he finishes re-organizing Twitter. (so investors can get out). The latter option is unlikely as he'd then have to push Twitter out of its control again. Thus, the most logical move would be to incorporate into TSLA as a part of it. While it might sound a lot at 44B, it's nothing when TSLA is at 1T+. This way, Elon can swallow Twitter, while not having to lose much control of his TSLA shares. (he borrows money to buy TWTR, merge with TSLA, gets paid in TSLA shares at whatever the premium, pay off by selling a bit of the now larger share pot) ...

I can't see how Elon buying Twitter is going to be a positive for Tesla shareholders. To me, this just looks like what a mid-life crisis purchase would look like for a man with the largest wealth and ego in the world.

1. Tesla already carries an exorbitant amount of key-man risk riding on Elon. Elon is known to work like 30 hours a day, 8 days a week? On top of Tesla, he's also managing SpaceX as chairman & CEO, Boring Co (transportation tunnel), and Neuralink Corp (brain-computer interface). And now he has to turn around a struggling (financially) social media platform to a hugely profitable business?

2. The last thing I want as a shareholder would be for Elon to dilute the value of Tesla by merging it with Twitter. I can't even fathom what the synergy would be between the two entities. Let's not forget that there is an active pending lawsuit between Elon and shareholders over the $2.6B acquisition of SolarCity by Tesla in 2016. Before the acquisition, SolarCity was a struggling asset (22% owned by Elon) that was bleeding cash. Shareholders have sued Musk alleging that the deal amounted to a SolarCity bailout that enriched Musk and his family more than it did Tesla, among other things. Elon could lose up to $13B if the judge sides with the shareholders.

From a personal standpoint, I am interested to see what Elon does with Twitter. He claims to be a "free-speech absolutist" but the problem is that the general public will ditch the platform if it turns into a 4chan type cesspool flooded with extremists trolling in bad faith. The ad-revenue definitely isn't going to grow if that platform heads in that direction either.

[Hondaracer]

Obviously any Tesla fan boy going to praise any move he makes lol

Twitter is like the 10th or 12th used social media platform with less than a quarter daily users than instagram at #3

I dumped twitter more than a year ago with zero regrets. If the user base somehow becomes ecen worse than it was, it’s going to appeal to far less people even with all the “free speech”

[whitev70r]

Best thing for everyone would be his financing or partner investors fall through on the deal and it doesn't happen.

[Ulic Qel-Droma]

Markets getting volatile

Interest rates up

Things feel recessiony

I feel like within the next 1.5-4 months the market will def be lower.

[whitev70r]

Markets (or the public) would seem to indicate that Hehe is wrong ... at least for now on the short term ... TSLA stock seeing a significant drop in price. Twitter is seen as an albatross to TSLA's neck.

[mikemhg]

^Just what I said, TSLA was overvalued @ $1,000

[whitev70r]

Now there is like a $1bn fee if either party pulls out of the Twitter deal .. pocket change.

[PeanutButter]

I'm not sure why anyone cares that Elon is buying twitter. He's buying it and taking it private with his own financing and capital. It has zero effect on anything. If anything, it helps the people holding twitter bags because their executive board is useless.

Also, TSLA just filed a form 4 with the SEC. Elon was selling shares to help finance his twitter acquisition, that's why TSLA dropped so much more than the benchmark.

TSLA going to the moon boys. I'll post back in 10 years when I'm retired! lol I love the FUD, it just allows me to buy more TSLA! Bring the FUD on, I appreciate ALL OF IT

[ilovebacon]

Do you guys own dividend stocks? with all the uncertainties, where do you guys like to park your cash.

Unlike vre.to, it has not grown since I last purchased it in October 2021... actually down on it.

[waddy41]

Majority of my portfolio is T and PDC, I also DRIP, a brainless way to keep reinvesting

I like PDC as it pays monthly so every month I am accumulating more shares

Also hold small amounts of BMO, RY and ZWU. ZWU I bought recently but regret it a bit, not going to put any more $$ in the market for a while now

[underscore]

Originally Posted by ilovebacon

Do you guys own dividend stocks? with all the uncertainties, where do you guys like to park your cash.

Unlike vre.to, it has not grown since I last purchased it in October 2021... actually down on it.

That's pretty much all I own, getting paid to do nothing is nice.

[SiRV]

Originally Posted by ilovebacon

Do you guys own dividend stocks? with all the uncertainties, where do you guys like to park your cash.

Unlike vre.to, it has not grown since I last purchased it in October 2021... actually down on it.

you are supposed to DRIP these funds, otherwise they will never move

--

I personally dump a paycheque per month into VEQT and DRIP it.

[instantneedles]

Not sure if this is relevant to the thread, but do any of you invest in private mortage companies?

Someone recently brought it up to me, and apparently there are 8-10% annual returns, and you get dividends after 6 months, which seems pretty decent. My only question is what the risk will be when the real estate market starts dropping.

[PeanutButter]

Originally Posted by instantneedles

Not sure if this is relevant to the thread, but do any of you invest in private mortage companies?

Someone recently brought it up to me, and apparently there are 8-10% annual returns, and you get dividends after 6 months, which seems pretty decent. My only question is what the risk will be when the real estate market starts dropping.

Which Mortgage Insurance Corporation (MIC) are you looking at? I can go through their prospectus and show you what I look for.

They're quite common to invest into. I feel they're a good position to hold in a portfolio. Anywhere between 5-20% of the portfolio.

If you're getting a MIC with 8-10% APR, then the fund you're looking at likely has a higher percentage of second mortgages (which I don't like).

I like to see what percentage of their mortgages are first mortgages vs second mortgages. If there is a default then the lenders on the first mortgage get paid first.

It's also good to note what their Loan to Value (LTV) ratio is. The lower the ratio, the better it is. Apparently, there is so much need for third party mortgages that these companies get to pick the "most ideal" clients. ie. These companies don't have enough money to lend out.


Great question about if RE drops. Try to think of it this way. You just bought a place to live and your condo drops $100k in value, what are you going to do? Most people aren't going to sell because they need a place to live, so they will still service their debt. The only people that sell are typically RE investors.

If the LTV is 80% on a $100k condo, the condo would have to drop 21% for the loan to be underwater, which is why a lower LTV mitigates risk.

[ilovebacon]

down 45%, see you in 3 years long-term portfolio...

[PeanutButter]

Originally Posted by ilovebacon

down 45%, see you in 3 years long-term portfolio...

A girl I know who just started investing during the pandemic told me she sold all of her stocks. She said the market is too volatile and it was better to just cut her losses.

If capitulation is happening, it's probably the best time to start averaging in. Almost everything is at or well below their 200 day moving average. Definitely should consider scaling in if you have any cash. And if you're buying every month, nothing should be changing, you should still be buying. It should be automatic.

[instantneedles]

Originally Posted by PeanutButter

Which Mortgage Insurance Corporation (MIC) are you looking at? I can go through their prospectus and show you what I look for.

They're quite common to invest into. I feel they're a good position to hold in a portfolio. Anywhere between 5-20% of the portfolio.

If you're getting a MIC with 8-10% APR, then the fund you're looking at likely has a higher percentage of second mortgages (which I don't like).

I like to see what percentage of their mortgages are first mortgages vs second mortgages. If there is a default then the lenders on the first mortgage get paid first.

It's also good to note what their Loan to Value (LTV) ratio is. The lower the ratio, the better it is. Apparently, there is so much need for third party mortgages that these companies get to pick the "most ideal" clients. ie. These companies don't have enough money to lend out.


Great question about if RE drops. Try to think of it this way. You just bought a place to live and your condo drops $100k in value, what are you going to do? Most people aren't going to sell because they need a place to live, so they will still service their debt. The only people that sell are typically RE investors.

If the LTV is 80% on a $100k condo, the condo would have to drop 21% for the loan to be underwater, which is why a lower LTV mitigates risk.

Thanks so much for the info!

They are called ginkgo.

Their pamphlet says they have a 65% LTV in BC and 69.75% LTV overall across 5 provinces. Also, 79.8% are first mortgages and 20.2% non-first mortgages.

I’m currently starting out investing, and 100% of my investments are with a robo advisor on wealthsimple. However, everything is dropping right now, so I’m looking at other alternatives like this.

Are MICs good for beginner investors?

[SiRV]

I would say these mortgage things are pretty risky - the best thing to do now is double - down on these super low cost ETF's right now, super bargain, super safe and awesome time to buy