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Warning: Game Changer January 1 Catalyst for Tesla Stock.
✅ Tesla's down rough today and folks are wondering why.
✅ An easy explanation are the priced cuts on new/existing inventory of about $3k-$3.5k on various $TSLA models.
✅ However, there are two additional catalysts.
✅ Hedgefunds increasing shorts
✅ Additional Elon / X drama, making institutional allocations to Tesla, imo, low/hard to defend.
✅ January 1 tax credit at point of sale is a dangerous catalyst that could hurt sales in Q4. Usually it's the opposite. That could create a dangerous year over year lap.
✅ Tesla supporting #GROK not a near-term catalyst. Eventually, all vehicles will have a voice-style of GPT 4. Not a priceable consideration.
✅Elon suing dissenters / blocking opposition encourages more one-sided discourse with Elon. TBD if that matters for the CEO of $TSLA?
⚠️⚠️My Take⚠️⚠️
-Short term BEARISH $TSLA, but I have no puts, shorts, and won't sell. Holding.
-January tailwinds will be large. These tailwinds MAY be priced in within December/before Q4 earnings **IF** rates drop below 4%.
-Worst case, rates stay 4.4% or go up. Then, Q4 earnings bomb with a "low hope" Elon on earnings.
-That would make a nasty January.
📝Disclaimer:
This video is not personalized financial advice for the viewer. Read the Offering Circular before investing in HouseHack.

Hey, a lot of folks are wondering what's going on with Tesla stock today at least at the time of this recording, and who knows it could be up by the time the market closes because the market has been so maniacal, The market presently is pricing Tesla down 3.2% and people are wondering why the first and most logical explanation has to do with this existing inventory. Price: Cuts But this is not the only explanation. so we'll get through the news here. So first, price Cuts obviously lead to the impression that Tesla is going to have lower margin.

Therefore, less profit, and ultimately less margin. Lower EPS means a higher valuation for Tesla. Then you get valuation compression and oopsy doopsy. Not only do you attract more short sellers who load in shorts when news like this breaks, but it does hurt some of Tesla's free cash flow now.

I Personally thought we were going to see negative free cash flow in the last quarter. We actually did not. Thankfully, knock Gunwood and hopefully we don't in this fourth quarter. This fourth Quarter is going to be particularly challenging for two reasons.

Number one: you've had the highest interest rates in this quarter. If you look at a 10-year treasury chart, you'll see high The highest interest rates were in October for essentially the whole year. Now they've come down since then, but they're only back to really what we saw during Q3. So that means much of Q4 has been exposed to unfortunately higher interest rates.

which is not great because that directly affects people's ability to afford a new car. so that's not great Combine that with discounting of existing inventory and the second issue that I wanted to bring up. So not just the discounting of inventory because of rates, but also the second part, what could be driving the discounting of inventory? See this Federal Tax Credit says here: the $7,500 tax credit can be redeemed between now and December 31st. That's fantastic, But that means you redeem that on your 20 24 tax return.

Which means let's say theoretically you buy December 31st. You're going to see that as a tax credit if you actually owe $7,500 in taxes, right? So you have to owe 7,500 in taxes and you have to qualify for the credit. So let's say both of those things are true. You're not going to see that money until probably when you do your taxes.

So like somewhere between March and May and then you actually get you know, any kind of, uh, tax payment or you make your payment. or if you're on extend men, you won't actually see it until October. The downside of that is we actually have a catalyst. Jan One Jan One Dealers are going to start being able to give this a discount this tax credit as a point of sale discount.

which means if you just wait a day longer to Jan One, Ironically, you'll actually get that tax credit immediately versus waiting for it. So those are two big catalysts that are hurting here. The interest rates of this Q4 and the fact that you're going to get this rollover and again, that is the dealer EV tax credit. So you could fact, uh, fact check that if if you want to, uh, search for it.
uh, you'll see articles like this: Car buyers can get their EV tax credits upfront at the dealership. Now, it's unclear exactly how given that that's a dealership will affect Tesla Presumably that'll apply to Tesla as well. But under new guidance, those purchasing electric vehicles or plugins that qualify under treasury hybrids or Treasury guidelines rather, uh, will be able to start getting these credits starting Jan one. Uh, Jan one.

So it's essentially what we've said here: Uh, there's a 27 page guidance on this. Uh, that. uh, breaks down the procedures for dealers or essentially manufacturers selling the vehicle. Uh, so we expect Tesla will be eligible for this, which again delays people's desire to buy because again, rates and you're incentivized to wait until January which it's holiday time I Don't know how many people are gifting Teslas for the holidays.

budgets are tighter now. people are spending on other things and gifts for their family and such and so as a result, available cash is a little lower and so what's happening? Well, the hedge funds are eating it up. Not only is hedge funds eating it up at the mainstream media, which we'll talk about that in just a moment. Here you go: Tesla Still hedge funds favorite short stock after heavy losses in October and so I think what you're finding is every time there's a price cut or any kind of bad news on Tesla it's very easy for the short sellers to load on the shorts you can see here: The Magnificent Seven Have Been Loved by hedge funds, but there's one notable exception they love to bet against Tesla according to Goldman Sack's latest hedge fund, Trend report Tesla Remains The most popular position amongst hedge funds as of Halloween despite the stock having risen more than 90% year to date.

but then again, that only does you good if you actually bought the stock January 1st if you bought it anything before that, you're probably not at a 90% gain right now on Tesla unless it was quite a while before that. Anyway, beyond that, there is also the Elon Factor So uh, you know I'm not here to bag on Elon you know I have my criticisms of Elon but I want to be very clear I Love Elon I'm inspired by Elon you know I think he's great but I do have my criticisms of him. Uh, that's I Think one of the things that people like to come to my channel for is I'm not afraid to speak my mind and I'll tell you what I think I'm not holding back I'll tell you what I like and what I don't like and uh, this is a Business Week article, so it's like, you know, very classic. Our mainstream news here, right? How Elon spent three years falling down a redpilled rabbit hole.

This is gaining a lot of attention right now. Uh, and it could be another reason institutional sellers or institutional you know fund managers are trying to distance themselves from Tesla because it's not just people who might not want to buy a Tesla because they're offended by elaw, but it's also fund managers who have to justify investing in Elon when companies like Lionsgate Apple Disney IBM are cutting their ad spending at the same time. as there is this belief that Twitter is very right-wing focused and potentially some people are now describing it Twitter brain. Wherein: uh, the Twitter platform actually ends up narrowing your world viw.
So uh, I have a comment on that. H I've actually kind of been just complaining about Twitter for a while. I use Twitter Don't get me wrong, and it's X I Know that it's just hard for me to make that switch. So I use x regularly.

Uh, but uh, I I I have to go on X and then I have to balance my usage on X with looking at other sources because if I only go on X I will believe we are going into a Great Depression that Democrats are the greatest fraud ever and I know half of you listening to this are going to be like that's right, but I don't believe that you know I I believe that there are definitely extremist Democrats just like there're extremist Republicans But I I don't I believe the majority of people are or uh, you know voters are are terrible people I think 80% of our country is is is you know, relatively the same wavelength I think 80% of us can sit down for a beer and go hey, let's talk stocks. let's you know, talk business, whatever right? I don't care if you're a Democrat or Republican So, but I do find that when you spend time Twitter Uh you you do generally get like you are incentivized basically to engage with content that uh removes a lot of context. Longer threads, longer context, longer form video does not do well. The average view duration of a meet Kevin video on YouTube for example is like 9 to 10 minutes.

The average view duration of a me Kevin video on Twitter is like 30 seconds. Uh, and that's like scrolling mentality. It's very much like Tik Tok right? It's it's you're scrolling. You watch for a little, get aead line.

keep going. So I think sort of a warning to people would be there. There is a real aspect to Twitter brain and I'm not saying that's necessarily bad. I like like you get some good quick news from Twitter you get some good quick perspective.

but there's definitely a balancing aspect that's required. But anyway, mainstream media is going after Musk for basically uh, his his thermonuclear lawsuit against Media Matters. We covered this in detail already. the Media Matters lawsuit we went through the actual lawsuit by Elon and X against Media Matters.

Uh, It's worth noting that the lawsuit they filed basically agrees that what Media Matters said was true, which is really bad because the only way you can win a defamation case is if you prove that what the other person said was false Elon and X alleged that well they presented manipulated data. Okay, well, that just dropped the odd substantially of success. But there were a lot of attorneys who replied to my analysis and they're like Kevin Isn't it a little ironic that Mr free speech is getting upset about somebody pointing out hey, you know, when we scrolled for 15 hours straight or whatever, we ended up finding a Hitler post next to an Apple ad is that not a form of silencing that form of free speech which then is similar to the belief that if Twitter if Elon is just reacting to uh, you know, individuals who promote uh, sort of red pilling so to speak and then Elon blocks people who have a contrarian point point of view, then does that narrow Elon's worldview. That's a risk, right? And so I'm not saying that I think Elon is narrow-minded I'm saying institutions have to defend investing in Elon to other people.
and if institutions think he's becoming narrow-minded or only looking at one side or having Twitter brain, then that is a near-term short-term downside. Catalyst of the stock I don't think it matters at all in the long term. you know the article goes on to talk about this sort of like red pill and what I think was interesting is this line Here these interactions boost Elon's standing with the far right or just the right in general and this was interesting and create incentives for those accounts to try to get his attention. That I thought was really interesting is this idea that oh Elon replied now you're incentivized to do more things that Elon might like which kind of gets you down potentially One Direction But anyway, look in the short term, those those are legitimate bad Catalyst In the long term is my long-term thesis really affected by any of this? No, not at all.

I haven't sold a single Tesla share. Uh, in 2023 uh, we have increased our allocation to Tesla We went uh from about 10% cash in the summer which I wish was 100% cash, but then again, hindsight is 2020. uh and we allocated that 10% cash uh to uh pricing power style stocks uh I uh still hold Tesla as a number one position personally. an interactively managed ETF big fan I think longterm, all of the short-term mindedness of Institutions will end up burning them, but in the short term the shorts could be right with Q4 Like Q4 is going to be tough, so there is.

There are definitely some real headwinds. I Think what we need for not having a disaster of a January Q4 earnings call which will probably be like what January 19th or 20th or whatever we really need rates to fall going into January and then Elon being like yo Q4 was hard, but that was the bottom. That's probably what you're going to need. So yeah, definitely shortterm paining ahead.

But I think a year from now, we could be in a substantially better place. Substantially better. Kind of like, you know, a year ago what? November 22nd year I wonder what our one-ear return is on? Tesla Right now? 37% interesting. The stock was $169 a year ago.
uh, and of course it fell to $109 I Do think there's still a little bit of that short short terness? uh to to worry about those. So if you're shortterm, heads up. now. another thing that's very interesting is there's been a lot of talk about Toyotas Uh, you know, solid state battery and I thought this was so interesting.

This was a, uh, a piece published. Who published this? The Drive published this. Look at this snapshot right here: Toyota Previously promised to launch its first solid state battery in the mid 2020s and now has a timeline for manufacturing. Two pilot or two companies will begin pilot production in 2027 and they'll produce seven, several hundred tons of the new electrolyte needed and they expect to enter mass production in 2030 to be able to supply over 10,000 vehicles.

And they suspect that these batteries will be used in some kind of super high performance EV Car not like Toyota Corollas So in other words, this whole solid state battery push is probably just Toyota clickbait. Uh, very interesting, but we already believe that and uh again, long run believer in Tesla shortterm. though we do have some headwinds. uh, it might end up being a buy the dip opportunity I don't know that today is that buy the dip opportunity.

you know I think uh you know you drop to like I don't I don't see us going back to 101 but you know you go to like a 175 on bad q1 earnings. probably buy the that might end up being the the local bottom. uh but there are plenty of reasons as especially the the recent discounting and that jam. One catalyst is big for short-term bearishness.

Anyway, thanks for watching. We'll see you the next one Bye Do not advertise these things that you told us here I Feel like nobody else knows about this? We'll We'll try a little advertising and see how it goes. Congratulations man, you have done so much People love you people look up to you Kevin PA there financial analyst and YouTuber meet Kevin Always great to get your take even though I'm a licensed financial adviser, real estate broker, and becoming a stock broker. This video is neither personalized Financial advice nor real estate advice for you.

It is not tax, legal, or otherwise personalized advice tailored to you. This video provides generalized perspective, information and commentary. Any thirdparty content I show should not be deemed endorsed by me. This video is not and shall never be deemed reasonably sufficient information for the purpose of evaluating a security or investment decision.

Any links or promoted products are either paid affiliations or products or Services which we may benefit from I personally operate and actively managed ETF and hold long positions in various Securities potentially including those mentioned in this video. However, I have no relationship to any issuers other than House Act nor Am I presently acting as a market maker.

By Stock Chat

where the coffee is hot and so is the chat

28 thoughts on “Warning: game changer january 1 catalyst for tesla stock.”
  1. Avataaar/Circle Created with python_avatars Liam Gauge says:

    Why is he stealing "Saving the money problem" thumbnail style? 🤔🤔

  2. Avataaar/Circle Created with python_avatars 3103frank says:

    Toyota > Tesla. You say it’s clickbait?!?! Bro every single word you speak about tezzzzzlaaaa is clickbait. Has been for 10 years LMFAO!!!!

  3. Avataaar/Circle Created with python_avatars Charlie Hulse says:

    Reality tends to have a right leaning bias

    X is right wing

    What a coincidence

  4. Avataaar/Circle Created with python_avatars SH DMD says:

    Joe Biden is trying to jail his leading political opponent for 900 years the guy who is leading him every single poll

    Is that different than what communist China and Putin does?

    Democrats are essentially communists

  5. Avataaar/Circle Created with python_avatars CL Bourbon says:

    Yes, everyone needs to wait till 01 Jan to get the 7.5k up front! This was signed into the act from the beginning just a lot of people don’t know

  6. Avataaar/Circle Created with python_avatars E LaVa says:

    So much drank Kool Aid….So little stocks

  7. Avataaar/Circle Created with python_avatars Kuskatan Morales says:

    Republicans & Democrats they are all a bunch of crooks. TALK ABOUT ORGANIZED CRIME !! THE WHITE HOUSE GANGSTERS

  8. Avataaar/Circle Created with python_avatars May Rasberry says:

    I can’t stand Elon anymore. World needs a break from him.

  9. Avataaar/Circle Created with python_avatars Michael B says:

    Ripping SMRs graphics are we?

  10. Avataaar/Circle Created with python_avatars Demotic Shadow says:

    Elon isn't silencing, however there comments are having a material affect on the company, feels more like slander than defamation…

  11. Avataaar/Circle Created with python_avatars gsxrjay750 says:

    This is the Kevin I like….multiple short videos with important updates…thats the Kevin I grew with….not really a fan of the multiple person podcast style

  12. Avataaar/Circle Created with python_avatars Gold life says:

    thank you Kevin! Elon Loves as too, he will make are rich!

  13. Avataaar/Circle Created with python_avatars Keith Jackson says:

    im wondering if this guy has tesla stock?????

  14. Avataaar/Circle Created with python_avatars PantherOooomooo One says:

    Kevin keeps giving voice to the dumbest straw-man and bad faith arguments from an obviously corrupt left-leaning propaganda machine -as though they’re valid reasons for shorting the stock. It’s obviously dirty politics, and politically motivated, and it’s insulting to our intelligence to not simply describe it as such.

  15. Avataaar/Circle Created with python_avatars Jay Yosi says:

    What happened to this guy's youtube channel. It used to get more views. It is dying right now. What a free fall!! 😅🤣🤣🤣

  16. Avataaar/Circle Created with python_avatars Charlie Lowrey says:

    It’s the options. Too many calls.

  17. Avataaar/Circle Created with python_avatars Kenneth Kim says:

    Regarding Cybertruck event next week??

  18. Avataaar/Circle Created with python_avatars hkmp5kpdw says:

    LOL… Democrats lying and cheating is not a conspiracy theory… Actions speak louder than words…

  19. Avataaar/Circle Created with python_avatars Ricletic says:

    don't forget that Elon will sell again billions of dollars of Tesla stock in 2024 to finance X Operations and to service his X loans

  20. Avataaar/Circle Created with python_avatars CyberJag PR says:

    Still dont understand why people vote Democrat when they are witnessing the downfall of all Democrat states and cities. L.A, San Francisco, Detroit, NY, Chicago, Memphis i could keep going. All Democrat cities are a DISASTER. They are letting criminals do whatever they want and run the streets with their crazy policies. They have mobs of people going into stores and taking everything they want 😂. Im not a Republican either because both parties are corrupt but at least Republicans are hard on crime and dont let criminals run their cities and they're also better with the border. We have thousands of immigrants coming in and now Democrat cities are struggling to help them. NY just said they are taking 100 million dollars from the city to help them and Chicago is doing the same and the citizens are not happy about it but they voted for these people. People really need to educate themselves and stop listening to the media

  21. Avataaar/Circle Created with python_avatars Madsox says:

    With modern technology and the ai revolution the odds are that we see some serious benefits to the economy regardless of the current climate. The crazy stuff, the extremism from either side is ridiculous.

  22. Avataaar/Circle Created with python_avatars TSLA👜HOLDer says:

    The Twitter echo chamber. Tesla investor’s 2nd greatest weakness. 1st is Elon as CEO

  23. Avataaar/Circle Created with python_avatars brightman group says:

    whats with the steven mark ryan thumbnail?

  24. Avataaar/Circle Created with python_avatars Tim Saunders says:

    I totally disagree with Kevin's statement on twitter. I enjoy the long form material and I also don't think it's biased. I think he is just following the wrong people.

  25. Avataaar/Circle Created with python_avatars BrY4Sh0rT says:

    Elon stands for free speech and spent $44 billion to protect it. He’s too wealthy and powerful to be silenced and censored, so the entire machine is coordinating an attack on X/Tesla. He is a direct threat to their agenda and their attacks will only become larger and more coordinated as the general election nears.

  26. Avataaar/Circle Created with python_avatars mariox says:

    Unless I see production line downtime, I think Tesla will be around 500k deliveries for Q4. the $ str has dropped 3% so far which helps FCF, I believe Q4 is when pent up energy revenue hits earnings, got hints of FSD beta coming to China, getting closer to FED cuts will push Tesla up….

    I believe Q4 earnings will be a surprise.

  27. Avataaar/Circle Created with python_avatars Jose Flores says:

    Tesla going downhill 😢😢😢😢😢😢😢😢😢😢😢😢😢😢😢😢to much competition I rather buy a Mercedes bmw anything but old looking Tesla

  28. Avataaar/Circle Created with python_avatars Viktor Possible says:

    This is a good argument

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