Connect with us

Investor's Corner

Tesla Battery Day skeptics are “bummed that what they hyped didn’t happen,” Cramer says

Credit: CNBC

Published

on

Tesla (NASDAQ: TSLA) Battery Day skeptics sat around and looked at the negatives, according to Jim Cramer. Ignoring the positives of the event altogether, the critics who said the company event was a failure are not looking at the right things, and they’re just upset that what they wanted wasn’t announced.

On an episode of MSNBC’S Mad Money, Cramer stated that investors shouldn’t sweat the decline that TSLA stock felt in the sessions after the Battery Day event. Instead, they should look at all the positives that CEO Elon Musk and company unveiled during the highly-anticipated presentation.

A $25,000 car, a plan for more affordable battery prices, and a blueprint to manufacture 20 million vehicles a year is enough for Cramer to be excited. Why others aren’t is beyond him.

“They’re just bummed that the things they hyped didn’t happen.”

“Tesla rolls out a plan to create an electric car for the masses and greeted with a yawn because Musk didn’t roll out a magic battery,” Cramer says. The idea that the event was a “flop” or was “underwhelming” is nobody’s fault but the critics, he stated.

Advertisement

“That’s what happens when you let expectations get out of control.”

Musk unveiled a new 4680 battery cell with increased power, energy density, and range. Also, it announced that Tesla was already making the cell at a pilot battery facility just down the road from its production plant in Fremont, California. Additionally, 20 million cars a year should be produced by 2030, which would eclipse the largest car companies in the world, like Toyota, which only makes 10 million vehicles annually.

The idea that a million-mile battery was a guarantee turned out not to be true. While Tesla unveiled a new, revolutionary cell, the company never mentioned any explicit details about a million-mile lifespan, and analysts got let down.

But ignoring all of the positives that Tesla announced because they didn’t get what they wanted out of the event is no reason to let the stock slide, Cramer suggests.

Tesla (TSLA) shares snatched up by ARK after Battery Day: “It’s going to be hard to catch up”

Advertisement

What Musk announced on Tuesday “could be as revolutionary as the Model T when Henry Ford…built 15 million of them,” Cramer suggests. “It was the first time regular people could afford a car.”

Now that Tesla is entering the realm of affordable transportation, people should be more excited. The problem is the event didn’t have all the flashing lights and sci-fi music, as the Cybertruck event did in late 2019. It was a presentation that had limited potential due to social distancing regulations, and Tesla did all that it could to make it memorable.

In reality, it was a super special day, and Jim Cramer believes that just because some people didn’t get what they wanted doesn’t mean that it wasn’t a huge success.

Disclaimer: Joey Klender is a TSLA Shareholder.

Advertisement

Joey has been a journalist covering electric mobility at TESLARATI since August 2019. In his spare time, Joey is playing golf, watching MMA, or cheering on any of his favorite sports teams, including the Baltimore Ravens and Orioles, Miami Heat, Washington Capitals, and Penn State Nittany Lions. You can get in touch with joey at joey@teslarati.com. He is also on X @KlenderJoey. If you're looking for great Tesla accessories, check out shop.teslarati.com

Advertisement
Comments

Investor's Corner

Tesla bear turns bullish for two reasons as stock continues boost

“I think from a trading perspective, it looks very interesting,” Nathan said, citing numerous signs of strength, such as holding its 200-day moving average and holding against its resistance level.

Published

on

Credit: Tesla Manufacturing

A Tesla bear is changing his tune, turning bullish for two reasons as the company’s stock has continued to get a boost over the past month.

Dan Nathan, a notorious skeptic of Tesla shares, said he is changing his tune, at least in the short term, on the company’s stock because of “technicals and sentiment,” believing the company is on track for a strong Q3, but also an investment story that will slowly veer away from its automotive business.

“I think from a trading perspective, it looks very interesting,” Nathan said, citing numerous signs of strength, such as holding its 200-day moving average and holding against its resistance level.

He also said he believes a rally for the stock could continue as it heads into the end of the quarter, especially as the $7,500 electric vehicle tax credit is coming to an end at the end of the month.

With that being said, he believes the consensus for Q3 deliveries is “probably low,” as he believes Wall Street is likely underestimating what Tesla will bring to the table on October 1 or 2 when it reports numbers for the quarter.

Advertisement

Tesla shares are already up over five percent today, with gains exceeding nine percent over the past five trading days, and more than fourteen percent in the past month.

While some analysts are looking at the performance of other Mag 7 stocks, movement on rates from the Federal Reserve, and other broader market factors as reasoning for Tesla’s strong performance, it appears some movement could be related to the company’s recent developments instead.

Advertisement

Over the past week, Tesla has made some strides in its Robotaxi program, including a new license to test the platform in the State of Nevada, which we reported on.

Tesla lands regulatory green light for Robotaxi testing in new state

Additionally, the company is riding the tails of the end of the EV tax credit, as inventory, both new and used, is running extremely low, generally speaking. Many markets do not have any vehicles to purchase as of right now, making delivery by September 30 extremely difficult.

However, there has been some adjustments to the guidelines by the IRS, which can be read here:

Tesla set to win big after IRS adjusts EV tax credit rules

Advertisement

Tesla is trading at around $389 at 10:56 a.m. on the East Coast.

Continue Reading

Elon Musk

Analyst: Elon Musk’s $1 trillion Tesla pay deal modest against robot market potential

Jonas highlighted Tesla’s longer-term ambitions in robotics as a key factor in his assessment.

Published

on

Credit: Tesla

Morgan Stanley analyst Adam Jonas, one of Wall Street’s most ardent Tesla (NASDAQ:TSLA) bulls today, has described Elon Musk’s newly proposed $1 trillion performance-based compensation package as a “good deal” for investors. 

In a note shared this week, Jonas argued that the package helps align the interests of Musk and Tesla’s minority shareholders, despite its shockingly high headline number.

Future market opportunities

Jonas highlighted Tesla’s longer-term ambitions in robotics as a key factor in his assessment. “Yes, a trillion bucks is a big number, but (it) is rather modest compared to the size of the market opportunity,” Jonas wrote. He added that the humanoid robot market could ultimately surpass the size of today’s global labor market “by a significant multiple.”

“We have entertained scenarios where the humanoid robot market can exceed the size of today’s global labor market… by a significant multiple,” Jonas wrote, as shared on X by Tesla watcher Sawyer Merritt.

The analyst likened the arrival of AI-powered robotics to the transformative effect of electricity, noting that “contemplating future global GDP before AI robots is like contemplating global GDP before electricity.” The Morgan Stanley analyst’s insights align with the idea that as much as 80% of Tesla’s future valuation could be tied to its Optimus humanoid robot program.

Advertisement

Elon Musk’s pay package

Tesla’s board has tied Elon Musk’s proposed compensation package to some of the most ambitious targets in corporate history. The 2025 CEO Performance Award requires the automaker’s valuation to soar from roughly $1.1 trillion today to $8.5 trillion over the next decade, a level that would make Tesla the most valuable company in existence.

The plan also demands a leap in Tesla’s operating profit, from $17 billion in 2024 to $400 billion annually. It also ties the CEO’s compensation to a number of product milestones, including the delivery of 20 million vehicles in total, 10 million active Full Self-Driving subscriptions, 1 million Tesla Bots, and 1 million Robotaxis in operation. Tesla’s board emphasized that Musk’s leadership was fundamental to achieving such ambitious goals, with Chair Robyn Denholm noting the award would align the CEO’s incentives with long-term shareholder value.

Continue Reading

Elon Musk

Tesla board reveals reasoning for CEO Elon Musk’s new $1 trillion pay package

“Yes, you read that correctly: in 2018, Elon had to grow Tesla by billions; in 2025, he has to grow Tesla by trillions — to be exact, he must create nearly $7.5 trillion in value for shareholders for him to receive the full award.”

Published

on

tesla
(Credit: Tesla)

Tesla’s Board of Directors has proposed a new pay package for company CEO Elon Musk that would result in $1 trillion in stock offerings if he is able to meet several lofty performance targets.

Musk, who has not been meaningfully compensated since 2017, completed his last pay package by delivering billions in shareholder value through a variety of performance-based “tranches,” which were met and resulted in the award of billions in stock.

Elon Musk’s new pay plan ties trillionaire status to Tesla’s $8.5 trillion valuation

However, Musk was unable to claim this award due to a ruling by the Delaware Chancery Court, which deemed the payout an “unfathomable sum.”

Now, the company is taking steps to ensure Musk gets paid, as the Board feels that it is crucial to retain its CEO, who has been responsible for much of the company’s success.

This is not a statement to undermine the work of all of Tesla’s terrific employees, but a ship needs to be captained by someone, and Musk has proven he is the right person for the job.

The Board also believes that, based on a statement made by the company in its proxy, various issues will be discussed during the upcoming Shareholder Meeting.

Robyn Denholm and Kathleen Wilson-Thompson recognized Musk’s contributions in a statement, which encouraged shareholders to vote to approve the payout:

“We’re asking you to approve the 2025 CEO Performance Award. In designing the new performance award, we explored numerous alternatives. Ultimately, the new award aims to build upon the success of the 2018 CEO Performance Award framework, which ensure that Elon was only paid for the performance delivered and incentivized to guide Tesla through a period of meteoric growth. The 2025 CEO Performance Award similarly challegnes Elon to again meet a series of even more aspirational goals, including operational milestones focused on reaching Adjusted EBITDA targets (thresholds that are up to 28 times higher than the 2108 CEO Performance Award’s top Adjusted EBITDA milestone) and rolling out new or expanded product offerings (including 1 million Robotaxis in commercial operation and delivery of 1 million AI Bots), all while growing the company’s market capitalization by trillions of dollars.

Yes, you read that correctly: in 2018, Elon had to grow Tesla by billions; in 2025, he has to grow Tesla by trillions — to be exact, he must create nearly $7.5 trillion in value for shareholders for him to receive the full award.

In addition to these unprecedented performance milestones, the 2025 CEO Performance Award also includes innovative structural features, born out of the special committee’s considered analysis and extensive shareholder feedback. These features include supercharged retention (at least seven and a half years and up to 10 years to vest in the full award), structural protections to minimize stock price volatility due to administration of this award and, thereafter, incentives for Elon to participate in the Board’s continued development of a framework for long-term CEO Succession. If Elon achieves all the performance milestones under this principle-based 2025 CEO Performance Award, his leadership will propel Tesla to become the most valuable company in history.”

Musk will have a lot of things to accomplish to receive the 423,743,904 shares, which are divided into 12 tranches.

However, the Board feels he is the right person for the job, and they want him to remain the CEO. This package should ensure that he stays with Tesla, as long as shareholders feel the same way.

Continue Reading

Trending