Skip Navigation Links
Review of Tesla (TSLA)
22 Dec 2022 (904 views)  

I hold 2,100 shares of Tesla at an average cost of $251. At the current price of $137, I see a paper loss of $240,000 USD (SGD 324,000). This wiped out most of the profits that I realized on Tesla during the previous two years.

Tesla stock dropped by 62% from $352 a year earlier to the current price of $137. This drop was caused by the following factors:

a) Interest rate in America rose sharply. This caused many tech stocks to drop sharply in price. 
b) CEO Elon Musk sold shares in Tesla to fund his $44 billion purchase of Twitter. 
c) Short sellers took advantage of the FUD (fear, uncertainty, doubt) to short the stock, causing it to decline further. 

This severe drop in the stock price occured during the past six months, in spite of strong fundamentals for Tesla stock (that justified its PE ratio of 100 times. This ratio has now dropped to 4o times).

I remain confident of the fundamentals of Tesla for the following reasons:

a) Tesla is able to produce electric vehicles at a high profit margin.
b) Tesla is able to produce many vehicles and overcome the supply chain shortages that plagued the industry.
c) The demand for Tesla EVs continue to be strong, although it might have dampened somewhat due to the global economic challenges.
d) Tesla will be introducing several new products that will ensure their growth over the next few years (Cybertruck, Semi, FSD software, Optimus robot, energy business).

I expect the current FUD caused by Elon Musk's purchase of Twitter to be temporary, and that the fundamentals for Tesla will propel a recovery in the stock price over the next 6 to 12 months. In case it takes longer, I can say - I am investing for the long term. 

I just bought another 300 shares, so my total will be 2,400 shares. 

One important consideration - I bought the shares with existing cash, and does not have any leverage or margin. I can hold the shares for the long term.

Tan Kin Lian

Note - I am giving my personal view. I am not giving "investment advice".



 
 


Review of Tesla (TSLA)
[Back] [Print]


I hold 2,100 shares of Tesla at an average cost of $251. At the current price of $137, I see a paper loss of $240,000 USD (SGD 324,000). This wiped out most of the profits that I realized on Tesla during the previous two years.

Tesla stock dropped by 62% from $352 a year earlier to the current price of $137. This drop was caused by the following factors:

a) Interest rate in America rose sharply. This caused many tech stocks to drop sharply in price. 
b) CEO Elon Musk sold shares in Tesla to fund his $44 billion purchase of Twitter. 
c) Short sellers took advantage of the FUD (fear, uncertainty, doubt) to short the stock, causing it to decline further. 

This severe drop in the stock price occured during the past six months, in spite of strong fundamentals for Tesla stock (that justified its PE ratio of 100 times. This ratio has now dropped to 4o times).

I remain confident of the fundamentals of Tesla for the following reasons:

a) Tesla is able to produce electric vehicles at a high profit margin.
b) Tesla is able to produce many vehicles and overcome the supply chain shortages that plagued the industry.
c) The demand for Tesla EVs continue to be strong, although it might have dampened somewhat due to the global economic challenges.
d) Tesla will be introducing several new products that will ensure their growth over the next few years (Cybertruck, Semi, FSD software, Optimus robot, energy business).

I expect the current FUD caused by Elon Musk's purchase of Twitter to be temporary, and that the fundamentals for Tesla will propel a recovery in the stock price over the next 6 to 12 months. In case it takes longer, I can say - I am investing for the long term. 

I just bought another 300 shares, so my total will be 2,400 shares. 

One important consideration - I bought the shares with existing cash, and does not have any leverage or margin. I can hold the shares for the long term.

Tan Kin Lian

Note - I am giving my personal view. I am not giving "investment advice".