I really wanted to be off for the day and the second I post my other video. what happens Oh Elon Musk Just sold casually. Three billion dollars worth of Tesla shares which we know it, We knew it, We didn't know, it was certainty. But let's put it this way, when Tesla volume has the highest bar, see that line right there At the bottom of that bar is so high to the point where we have not seen that height since the meme era of October November of 2021, We know something crazy happening.

Okay, I mean we we briefly broke that downtrend down there and it's already a bad downtrend. So we need to talk about what this means for Tesla stock going forward. Is it good or is it bad and I think it's time we just break out the fundamental analysis again. First, you have to understand something really important when it comes to Executives like Elon Musk selling shares, You have to ask yourself, why are they selling If you have a company that the executives don't believe in like Carvana or Open Door Guess what you see for the months before you start seeing pain in the financial reports: sell, sell, sell, sell.

You see real fundamental problems from the red flags of insiders selling Insider selling are often a red flag of problems to come at the company. In this case, we do not believe that Elon selling or red flags of problems within the company although they can be Elon Musk with certainty. we know this. He's told us this on earnings calls, knows what the deliveries are like, and the orders are like for Teslas on a day-to-day basis Elon Musk can probably see orders at Tesla plummet or cancellations Skyrocket when he tweets stuff like prosecute fauci on Twitter because even if you think that is right and Justified some people who might be Tesla order holders are not going to appreciate that whether or not it's true.

Okay, we're gonna move past that because we don't want to be political in this video. So it is possible that Elon Musk is selling because he fundamentally sees uh-oh Q4 earnings are gonna be oop bad and Q4 is January 22nd for Tesla is when their earnings call is I believe it's the 22nd, it's either the 19th or the 22nd. It's right around that range for January. But the point is Elon Musk might be thinking I better sell now because the stock could go down more and if the stock goes down more then it's going to be very difficult for me to raise more money in the future.

I'll have to sell more of my Tesla shares in the future to fund my other projects in this case, rather than take out a margin loan against Tesla stock which was rumored a week ago and boy oh boy was that an indication that Elon was about to sell. What did Elon tell us today on Twitter don't take out margin boys and girls stay away from Leverage He replied to someone's tweet suggesting you stay away from Leverage when it comes to stocks. what was he considering last week taking out more margin against Tesla stock. Apparently he decided against that and instead after selling tweeted hey, long-term Elon's goal is to see Tesla investors benefit from the Twitter acquisition and boys and girls stay away from margin which in a recession is actually Sage Advice Now keep in mind I am a financial advisor.

This video is not personalized Financial advice for you but I think the smartest Financial advice anybody can give is don't be in margin Going into a recession. That is the worst thing you could do because there could be really bloody things that come up between now and when the recession actually bottoms. So yes, usually Insider selling is a bad thing. Yes, it is possible.

Elon Musk is aware of short-term very negative catalysts for Tesla Yes, it makes sense not to go in on margin and it makes sense to have some cash on the sidelines. It also doesn't help that Elon Musk has regularly tweeted things like the following: If the Fed raises rates again. next week the recession will be greatly Amplified Don't mind the fact that that was a week ago and what did Federal Reserve chairperson Jerome Powell to do today He raised rates by 50 basis points. So yes, Elon also sold right before the FED meeting.

How interesting. Anyway, all of that aside, it is now important to understand that yes, this is inconvenient for a law for for a short-term Tesla shareholder. but what does it mean for a long-term Tesla shareholder and could it be a buying opportunity? Well, that depends first when you see liquidity so thin like it is now in a recession where everybody is Dashing for cash and you have funds like BlackRock All of a sudden saying we have no cash. we can't do any more redemptions because we've hit our limits because everybody's trying to pull money out of stuff.

What happens? well, dips can't be bought as much as they used to be able to be bought this morning. I Posted a Vanda track research report that showed retail dip buying actually fell to some of the lowest levels we've seen this year and the average of the past few weeks is about 20 percent lower than the average we have seen over all of 2022. That's because we've shifted down down from about 1.2 billion dollars of retail stock buying to about a billion dollars of retail stock buying on The Daily Unfortunately, when you look at the order book Elon Musk's selling over the last few days specific, it seems like most of the shares were sold in the 12th uh is so heavy. three billion dollars worth that every single retail purchase of stocks in every single stock combined over the last three days would have had to been Tesla stock just to offset Elon's sales.

Think about that for a moment. Retail buys an average of 1 billion a day. Elon Just sold. Well, three and a half billion? That takes three and a half days of all combined retail purchasing power out of the market.

You're going to destroy the order book. The order book gets reamed when Elon sells large chunks like that. It is such unfathomable, like unfathomably large amounts of money that when you look at it that way and you go oh my gosh, No wonder the stock plummets when you think of it from an order book point of view. Yeah, because remember, not every retail purchase is Tesla stock.

duh because there are other companies. in fact. uh, in the report that we did this morning, we actually broke down where retail purchases are going. Uh, and you can actually see a lot over the last five days.

The five day average, we only had retail inflows of about 609 million. but Elon Musk sold 3.5 billion. and then you had obviously money go into other retail stocks like Apple Amazon Video, AMD Meta Netflix Alphabet, blah blah blah right? So okay, short term. Is it a red flag? Hell yeah.

Because if Elon Musk thought oh man, Q4 earnings are gonna be great, why would you not wait until after those earnings? Well, maybe on one hand, because you think the FED is going to be evil to us, or you're just saying you think the FED is going to be evil to us Well, the reality is, you know Q4 earnings are gonna suck and Miss Expectations short term. This is terrible news. Long term. This kind of order book Crush where you absorb three and a half days of the entire stock market's retail buying in one stock long term is actually a phenomenal buying opportunity.

see I am a long-term shareholder of Tesla So I want to be very, very clear that I have tax loss harvested a tiny portion of my Tesla stock yesterday I Just wanted to clear out my Weeble account, which had a small fraction of my portfolio. so I did a little bit of harvesting yesterday I then bought an actively managed ETF that has a good exposure to Tesla So that way I'm able to take a tax benefit on a harvest while moving into something that's at least substantially different. Always check with your CPA obviously and that way I'm still getting some upside exposure in the event that there's a rally in the future. but I'm also diversifying into a much more tax efficient vehicle than holding an individual stock.

I mean an actively managed ETF that can rebalance without passing on massive capital gains or potentially any capital gains. To me, there's a big advantage to that. Uh, but look, long term. this kind of order book destruction at the same time as institutional investors find Tesla potentially uninvestable for political reasons or because of fear that Twitter is going to continue to be a drag on Tesla stock.

Rightfully so, it has been, and clearly today continues to be. Well, those are bad short-term catalysts. Phenomenal long-term catalysts. For a Tesla investor, it's very difficult to find the bottom in a stock, but right now it just doesn't feel like the bottom is close.

especially with Elon selling. Although hopefully maybe that's selling freaking stops already and maybe we're good for a couple years, You know it'll be phenomenal. Elon If you're listening, If you're allowed to do this, run it by your SEC babysitter. Could you let us know like something like hey, the way things are now I have enough cash to fund Twitter for the next three years That would be like, really appreciated.

Okay, so let's let's do uh, some fundamentals. Keep in mind Fundamentals do Not predict short-term price movements. Fundamentals: Do not tell you that the CEO is about to dump a bunch of the damn stock and go buy another pet project and fund that money losing pit of a pet project. you're making lose more money by making stupid political statements with the stock that somebody else is trying to do a fundamental analysis on.

Not bitter. uh. Anyway, so uh, let's just try to understand this. Uh, let's play with this a little bit.

I'm gonna go I'm gonna change some numbers here. Let's go to 2025.. Let's assume the average revenue per vehicle on a Tesla stock in 2025 is around 47 000. Uh, let's keep.

uh I'm Really Gonna Keep FSD uh Tesla Taxi Tesla semis I'm Gonna Keep Most of this stuff at zero. I'll just assume whatever FSD sales we have go into the actual Top Line average selling price per vehicle will keep leases around that three percent number. Services tends to be a break even although it's slightly turned profitable recently. Uh Energy will keep that around one percent.

as it scales with Total Revs margin. We'll keep that at thirty percent assuming we get some deflation. Although we are seeing lithium go up, that should really only affect Tesla's Uh, you know cost per vehicle by you know, a factor. Maybe a hundred bucks a vehicle.

With some of the lithium inflation we're seeing, it's actually not that heavy of an expense for Tesla You know? certainly. Commodities Like you know, metals are going to be much more impactful I believe to Tesla Uh, coppers for for Motors and such. Anyway, expenses on leases expenses. We're gonna go with that 30 profit margin I Actually do have about a five percent margin in here for services.

Uh, again, zero on insurance. That's just icing on the cake. It's called a margin of safety. Uh, again, fundamental analysis does not is not technical analysis.

It's not going to tell you about how going forward it is possible that we have more shares outstanding in the future. Although, if Tesla does conduct a share buyback, this could actually be less. We'll keep it stable for the purposes of this video. Uh, the beautiful thing here is that at 180 which the stock is not selling 480 right now at 180 dollars, Tesla's forward p E to the end of 2025.

Actually, wait a second. I have to change this. Uh, that's at to 21 2.1 million vehicles I expect 2.1 million. Uh, 1.9 million Vehicles probably for 2023..

let's go with um, you know what? let's just go a little bit more. Maybe conservative. Let's go like four or five. Okay, let's go with 4.5 for 2025.

4.5 million Vehicles Oops, that's actually less than what I've previously analyzed. Uh, so a little bit more conservatives as a middle of. so if I do that, you can see the growth rates over here in vehicle production would be about 35 percent for 2023. Uh uh yeah, it's not gonna be this.

High Hold on a sec. Uh, let's change this. Let's make this realistic together. What's this gonna be? It's gonna be like two seven.

Come on, let's do it together here. Two Seven. That's realistic. Yeah, you know, if we get out of the covet area potentially realistic, let's let's drop it a little bit more there.

I'll go with four two I'll go with four two. Uh, let's just be as as conservative as possible assuming all of these vehicles get sold. If the vehicle stops selling, the growth story collapses. Tesla goes to trash.

Uh, the only way Tesla is actually EPS Recession resilient is if all the vehicles sell. notice how I said EPS Recession resilient and not Twitter or political BS resilient sucks. but it's just the reality we're dealing with. It is what it is.

Don't worry, we still have time to buy real estate anyway. Uh, that puts our P E ratio price to a forward price to earnings ratio. Is that true? 11 bucks EPS 2025. That puts our forward at just 15 forward.

Are you serious? I Guess so. Uh, 4.2 million vehicles at 47 000 of vehicle revenues of 224. Expenses of 30. We're going to bring uh 15 mil of Opex down.

total expenses 175 gives us a profit of about 50 million. Taxes will pay 19 maybe a little less with some energy tax credits. Remember, the energy tax credits are actually going to prop up this right here. The average selling price per unit is actually probably going to be higher because of the energy tax credits, but let's just include that as a margin of safety.

We'll leave that at 70 percent. Uh, profit per vehicle? sorry, expense per vehicle 30 profit margin. So if we go over here, that's a forward price to earnings ratio of 15 at 180 a share. we're not even at 180 per share right now.

Uh, that puts Tesla's P E ratio in 2025. Well, if Tesla's P E ratio in 2025 is 50. Okay, that that implies a more bullish market and a serious growth rate like okay, now now Tesla's actually cranking semis, you know, or like cyber trucks and we're like, okay, people are betting on Tesla Again, Okay, that's what a 50 is. Well, a 50 with I Think these relatively conservative numbers gives a it gives us a 600 price Target roughly 585 price target for Tesla Uh, if the present value is is one 180.

Just to stay consistent with this, that's a 48 compounded annual rate of return over the next three years. That's really freaking good. Okay, but Tesla ain't selling for 180 a share. What's Tesla actually selling for? Oh Damn.

156 dollars per share? Oh well, if I put 156 dollars per share in, oh, that just makes the compounded annual rate of return about 55.4 over the next three years. Holy crap, this is. if you can hold on to Tesla until 2025. This no guarantees, not personal financial advice for you.

If all of these assumptions come true, this looks like the mother effing freaking buying opportunity of a lifetime. That's what this looks like. I Mean Honestly, you could go in here and drop the P E ratio to Apple today and Tesla's not going to be at maturity in 2025.. But you go to Apple today, you're still at 351.

that's still a 31 annual compounded rate of return over the next uh, three years with pretty, in my opinion, conservative assumptions. The biggest non-conservative assumption is that Tesla sells all the vehicles of banks. That must be true. But if look, you're not a Tesla investor.

if you don't think Tesla's going to sell every vehicle they make, you have to believe every vehicle they produce gets sold. If you don't believe that, don't own the stock. My take again: I'm a licensed financial advisor I Run an actively managed ETF But I cannot give you personalized Financial Advice So this is actually long-term glorious, Glorious. short-term Very bearish.

It is short-term Very bearish because of what I've described in this video and at this point all I have to tell. There's more we have to talk about. But I do want to remind you that we have a coupon code expiring tonight. It's coupon code P P Okay, stands for pricing Power link down below expires tonight.

We did extend it from Friday because we were ringing the bell at the New York Stock Exchange and we didn't get well. Let's just say I neglected making sure we got back to emails and and helping myself because we were all stressed and running around the New York Stock Exchange My fault. So we've responded to pretty much every bundle coupon, request email already today, so we've been doing very, very well. Okay, so what else has happened? Okay, well, another thing that happened is we actually saw Elon Musk potentially.

Uh sue the person who's been revealing the location of Elon Musk's jet because apparently there was an incident where Elon Musk's vehicle carrying his son X was followed. Uh, and then Not Only was his son followed, but somebody jumped on the hood of the car thinking Elon was in it. That is disgusting. That is so bad now.

I Have made multiple videos today imploring Elon Musk and the Twitter staff to please make sure that if they make rule changes, they apply the rules equally. There cannot be hypocrisy. There must be rules applied equally. If you ban private jet location sharing which is protected by the Supreme Court and protected by the First Amendment then you must ban it for everyone.

Not just your jet, but it looks like that's exactly what has since happened. Elon Musk States Any account doxing revealing real-time location information of anyone will be suspended as it is a physical safety violation. This includes posting links to sites with real-time location information, posting locations some will travel to on a slightly delayed basis. We believe that's about 24 hours isn't a safety problem, so it's okay.

Last night, a car carrying Little X in Los Angeles was followed by a crazy stalker thinking it was me who later blocked the car from moving and climbed onto the hood. Legal action is being taken against Jack Sweeney the person who ran the Uh Elon Musk Elon's Jet Twitter account and organizations who supported harm to my family Uh, I'm gonna just take a deep breath here. and first of all, Express Condolences This is disgusting. I Like nobody should show up at your home.

Nobody should show up where your car is. This is wrong. It's not okay to do that. There are formal ways to meet people at events, not at people's homes or around their personal locations.

I Do think that some of the action taken uh by Elon Musk was a little rash in response to this, but I also respect why it was rash. His son's safety was jeopardized. I totally get it. That's terrible.

Rashness should be prevented on an executive level and I think it will be in the future. I Do think it might be a little bit extreme to suggest that legal action is being taken against the founder of the Elon Jet account because Elon Musk did say he would not take action against somebody tracking his jet because he deemed It Free Speech Elon Musk himself said tracking his jet is free speech and he won't take action against it. So it's one thing. if now you got scared rightfully so.

and then you make a rule chainsaw on Twitter and then you say yo Jack Sweeney Stop tracking my jet. It's against the rules now and then Jack stops. That would be the appropriate way to do it. But to say it's okay for you to track my jet.

Holy crap it's not okay now. I'm suing you. That's not okay. I Don't actually think that legal action is going to go anywhere because of what I've just outlined.

However, it is going to make for a very clear rule change at Twitter and that is rightfully so and again I Want to be very clear that if somebody did that to my child, I would be losing it I would I I like I don't even want to speculate. Okay, like I feel like I'm getting teary-eyed thinking about it. So even though that has not happened to my children I feel as though I can at least sympathize, maybe slightly empathize. I Obviously I haven't been in that situation, right? That's the difference between sympathy and empathy, right? It is having been in the situation versus not so.

I Get it. These are my thoughts. So what did you learn in this video? My price targets for Tesla my motivation and my belief in Tesla I Did you know I I did reveal also some actions that I've taken with Tesla stock uh in the last few days. very very very nominal.

Okay I don't want anybody to think like oh my God I kind of slept, flopping or whatever. so I know sometimes people don't listen to the whole video. uh and and I gave some very clear updates and uh as as unbiased as possible opinions regarding the Twitter situation. Although I think at this point you all know my biases and it is clearly that you need to check out with coupon code PP because we don't have sponsors on this channel and the only way I put bread on the table is by providing value to you whether it's through course member live streams.

Our Five million dollar Trading Challenge where we're building up a trading account to five million dollars by the end of next year starting today is when we started uh, doing more lectures for free and of course posting more videos. So if you see me posting more videos on YouTube and you're frustrated because you're not getting all of the notifications, all you have to do is see we've already solved. This problem is type meet Kevin into your Android or Apple App Store Download the meet Kevin app and you will get all of the notifications should you want all of the notifications because YouTube will only send you three notifications in a 24-hour period. But in addition, the reason I provide more value by making more videos or providing more lectures or doing more live streams or coming out with new courses or whatever is because what do I say on the channel? We're in a recession and in a recession you should work harder and guess what I'm doing? Check out with coupon code PP link down below.

Thank you for being here. We'll see in the next one. Good luck and goodbye.