Tesla is straight up bankrupting the competition. In this video, we're going to review how Tesla is bankrupting the competition and we'll start by looking at a used car dealer followed by a couple of other very popular EV manufacturers. We'll go ahead then see how Tesla might be shooting itself in the foot thanks to a margin preview that we get for Tesla. We'll also look at an earnings preview.

We'll understand what's going on with car rental companies and Tesla we'll take a brief look at a Twitter regarding its profit problems and debt and how that could affect Tesla And then of course we can also not end a Tesla video without talking about the lawsuit over potential Elon Musk fraud or defrauding investors for his tweet from 2018. hey everyone Me: Kevin Here we've got a lot to cover and hopefully we get done before December Well, we're already in January before January 30th, which is when the coupon code link down below expires and that will be the best price available for at least three months guaranteed for you. After that, the prices on building are both go up and once you're in your lifetime, access to all of the course member live streams that we do and the archive of course member live streams. Check those out link down below.

First, let's talk about how Tesla is bankrupting the competition. First, let's start by looking at what the car dealership guy says on Twitter. He says here's a Tesla Model Y listed on Carvana for twelve thousand, six hundred dollars more than a new car. Carvana's management literally asleep at the wheel.

He says now I Had to personally fact check this because I Found I Found it remarkable that a Model Y that's used with 14 000 miles would be listed for more than a brand new model Y. So what did I do well I Went to Carvana's website, typed in model Y and sure enough, I can overpay by about seven thousand dollars for a last year model model Y with about 2500 miles. Given that the current new price of a car a model Y is sitting closer to 52 000. In fact, you could see that right here.

This is the Model Y long range 52 thousand, Nine Hundred and Ninety dollars. and this is not on the potential savings tab. it is under the actual purchase price tab. So just remember that number for a moment.

Fifty Three thousand dollars is roughly the new price, right? Uh, and if you zoom out, what do you get on the Carvana website, you end up getting these vehicles sitting here for Fifty Nine Five for the Tesla Model y long range Tesla Model y Long range 55 9, 19, 000 miles Almost. Here's another long range for Fifty Seven thousand dollars, Five thousand miles A 2022 Here's a 2021 13 000 miles Basically the same price as new and it makes you wonder what is Carvana thinking, why would they not appropriately adjust prices So that way they could actually maintain a Competitive Edge for their used vehicles and car dealership guy actually suggests that this is exactly what CarMax is doing. In fact, CarMax dropped prices immediately after Tesla drop prices and they sold 57 percent of their entire Tesla inventory in just 24 hours. and as of the next morning, the stock continued to fall.

So the car dealership AI Paying attention to this now. we did notice that vehicle prices have started getting dropped by Carvana on Teslas but again, if you go to the main inventory page, you still get a whole host of vehicles that are actually showing as more expensive than Tesla's now after the Tesla price drop. Now that's quite remarkable And so it made me wonder, oh my gosh, what if Tesla is actually bankrupting these companies? So what I wanted to do was jump over here I went to the Carvana balance sheet and I went ahead and did these numbers for us already and what I did is I took their balance sheet which is right here as of September 30th, 2020 and I made some adjustments because I want to see how close to bankruptcy this company actually is. Keep in mind if you search on YouTube meet Kevin Carvana, you'll see that I've already been covering the bankruptcy story for Carvana for a while and I think this is an incredibly dangerous stock to huddle.

They also just adopted a poison pill, which honestly is quite ridiculous. They don't want anybody to adopt more than a five or buy into more than a five percent position of or of for Corvana stock because they're so worried about being taken over for some reason. But their excuse is absolutely hilarious and then I'll show you the balance sheet. Look at the excuse that they're giving.

They're saying here that Carvana wants to preserve the ability of Carvana to basically take tax benefits from Lost carry forwards. In other words, if you lose so much money that you're so good at doing nothing but losing money like let's say you lose a hundred million dollars or in the case of Carvana, maybe a lot more then in the future. If you make say 10 million dollars of positive Revenue you might be able to carry forward some of these losses and offset your income to where Usually if let's say you made 10 million dollars of income, you might have to pay 2.1 million dollars in corporate taxes right? about 21. But because you have all these losses that actually becomes an asset.

So in some Twisted perverted way, this loser of a company is trying to preserve their leftover asset of potential tax carry forwards. So that way they could say hey, look, we made money again. Now we don't know those taxes. This is kind of like the Amazon mentality where it's kind of like hey, we've lost so much money in the past we shouldn't have to pay any taxes on our new income.

It makes sense. That's called entrepreneurship and capitalism and the way the tax structure is set. But what's fascinating is Carvana is basically telling the world. Hey, because we are so good at losing money, we do not want anybody taking control of more than 4.9 percent of this company.

and as soon as anyone does, we'll basically just do a stock split, basically giving everybody two shares for one share that they have except for the person who took more than a five percent share. So in other words, they instantly get diluted down to about two and a half percent ownership as soon as they go and hit five percent. Now that's pretty wild and this is called a poison pill. and the excuse they're using for this poison pill is we're so good at losing money that is now an asset.

Okay, fine, but now we need to actually try to understand what's happening on their balance sheet because it'll show you how Tesla is actually forcing deflation by basically bankrupting the competition. And it ain't just Carvano. Okay, watch this. Okay, let's go over here and let's take the green column and say that's Carvana's vision of their assets.

Carvana wants you to think they have 9.6 billion dollars in assets. That's this piece right here. They want you to think they have 9.6 billion dollars in assets. So what I'm going to do is I'm going to go in here and I'm going to add up things that I think matter I'm going to take their cash position I'll take that I'm not going to give any value to their restricted restricted cash position because this is probably going towards new cars that they're probably going to lose money on anyway.

So I'm just going to be a little conservative and take that out for a moment anytime. I Do critical fundamental analysis I Like to be very conservative, right? I Want to know the worst case scenario? So I'm going to be a little bit more aggressive here. I'm going to give all financing and vehicle inventory that they are trying to sell L like loans or cars. they're trying to sell a 20 discount.

So rather than giving them 2.5 billion dollars for car inventory, I'm only going to give them two billion dollars rather than giving them 485 for loans held for sale. I'll give them 400. All right, fine. I'll give them their beneficial interest in securitizations.

but uh, these other current assets, you know I'll carry those forward as well. That's fine. But because of these discounts, I'm only going to give them 3.7 billion dollars of actual current assets when it comes to long-term assets. I'm gonna remove anything I think has no value plant property and Equipment these are like car vending machines and Carvana Car Transporters and Carvana branded software.

I Think this has virtually no value in the event the company goes bankrupt or it would have some really low liquidation value. So to be safe, I'm gonna say this has no value. Their leases have no value. if they go bankrupt, they're intangible assets or their Goodwill like their trademarks and their brand have no value and these other assets from uh do from related parties I I Went ahead and even though I wrote no value I gave them that 214.

Anyway, So now when we look and subtract their plant property and Equipment their Goodwill and their brand value and their trademarks and all this stuff that really doesn't matter what we end up with, this is lease right? And anyway, these things have no value. What we end up with is a company that actually only has total assets of about 3.9 billion dollars. They say they have 9.6 billion dollars, but because they're knocking on the door of bankruptcy, I'm going to be very aggressive here when I add up their debts I get roughly the same number that they do in debts about 9.1 billion dollars. That means Carvana in my opinion has negative shareholder Equity of 5.2 billion dollars.

They're so far upside down they are trying to tell the world. No, no, we have at least 374 million dollars of equity, but they're propping that up with stuff that's valueless like their brand, which there isn't really much of one left. Uh, and they're not doing a good job on their website of preserving that thanks to Tesla's price drops. And so really, what you're creating here is a company that's going bankrupt.

You don't have to look too far down their third quarter income statement to realize they're screwed. While yes, they actually made a gross profit of 359 million dollars selling about 2.5 billion dollars worth of vehicles in wholesale and to retail, That 359 million dollar gross profit gets eaten up by more than 153 million dollars of interest expense, and SG a expenses exceeding 650 million dollars. That's a lot. And so it's no wonder why they're losing 500 million dollars a quarter.

Or at least this last quarter they were doing better. Uh, last year. Obviously, they were only down 68 million, but even last year they weren't even profitable. And over the last nine months, they've lost basically 1.5 billion dollars.

1.452 to be exact, But that's roughly 500 mil per quarter that they're burning. But wait a minute. If we actually go to their balance sheet, we don't have 500 million cash, Exactly. That's because the company's going bankrupt.

and Tesla just contributed to that by basically forcing all used car companies to increase their discounts on their existing inventory, substantially, pushing companies like Carvana closer to bankruptcy. But it's not just Carvana that's getting pushed closer to bankruptcy, it's also other manufacturers. Look at Arcimoto. Arcimoto Money losing company I've interviewed the CEO but 4 I've posted my criticisms online before.

Type into YouTube Meet: Kevin Tech Archimoto. You'll see my most recent interview and you'll see that money losing companies if they can't turn a profit in a recession, have to resort to selling stock on the stock exchange. But when they do that, they substantially depress the value of their stock because there doesn't tend to be a lot of buying liquidity. So what ends up happening? Well, you end up getting unfortunately, a company whose CEO I like, but it's not a company I would invest in, You get a company like Arcimoto dropping 58 in a day.

Yikes, because they have to dilute their shareholders. But it's not just companies like Arcimoto, it's companies like Rivium. Let's look at Rivian for a moment. Here, You have a company that in 2022 is generating half a billion dollars of Revenue.

But their costs to achieve that Revenue are 1.4 billion dollars. That's gross profit of negative nearly a billion dollars. So in other words, it costs them 2.71 cents to make one dollar. And we're not even talking about operating expenses yet, which are running at 857 million dollars.

Rivian is next to have to raise a lot of money. Unfortunately, it gets not much better when you look at the Rivian balance sheet. Yes, they have about 13.2 billion dollars in cash. Yes, they only have about 2 billion in payables.

That gives them about 11 billion dollars in free cash. That's fantastic and they're going to need it because when we go over to the cash flow statement, we could see that unfortunately, they're operating. cash flow is negative. 3.6 billion dollars in nine months plus the Investments The Capex.

they're spending of about 1 billion dollars. You're looking at about a 4.6 billion dollar burn and they have 11. that gives them about 2.3 years before they run out of money. Unfortunately, you don't want to get get close to running out of money for when you start raising money.

So in my opinion, Rivian is another one that if they continue on this course of losing money for every vehicle, they are Manufacturing in the ramping process. Yikes. You're potentially looking at bankruptcy Now, don't get me wrong, and I've done this comparison before. You could actually go on YouTube and just type in meet Kevin Tesla versus Rivian versus Lucid.

If you go back and you look at Tesla at roughly this similar amount of production as where Rivian or Lucid sits. now, guess what? Tesla was making a profit per vehicle, Not a large profit, but a profit. When you look at both Rivian and Lucid, they are burning money substantially. We're not even close to profit.

And by Tesla reducing prices, you're putting even more stress on these margins. That's not very good. In fact, if you jump over to the Lucid earnings report, what you have is you have 195.4 million dollars of Revenue and what's their cost of Revenue 492.4 before you get to operating expenses. So another example where you have a company spending 2.52 cents to make a dollar and Tesla dropping their prices does no good for used car companies.

Rivian Lucid even Ford Ford can't even manufacture an electric vehicle with a positive gross margin. They're negative on producing mockies. They lose money on Maquis. That's insane.

So what do you end up with? You actually end up with a strong likelihood that as long as Tesla can survive this recessionary environment, the competition is going to be be beaten to death or near death. They are going to have to raise so much money and dilute their shareholders so much that they might have to de-list from stock exchanges or go bankrupt. Now it's not to create fear or fud for other companies. It's just to say when Tesla Cuts prices other companies freak out.

Reason why: after Tesla Cuts prices xping and Neo stock fall Ford and GM stock fall Volkswagen and BMW stock fall, it's because everyone is worried that the entire industry is going to compress. and given the fact that the biggest Chinese auto manufacturer known as Byd makes just 1.45 for every one hundred dollars of income they receive, whereas Tesla brings 14 to the bottom line for every 100 they sell, you have a lot of concerns that the entire EV manufacturing world is about to get shifted down. Which means yes, Tesla margins are going to go down down, but the rest of the EV sector goes negative and that means Tesla might be one of the few survivors who's actually able to expand during this recession. Unfortunately, as we talk about expansion on one hand, we also have to be realistic that yes, Tesla is unfortunately going to suffer some kind of margin compression.

and this is where it's worth looking at Bloomberg's estimate for Tesla's margin compression. So what we're going to do is we're going to jump on right over here and we're going to look at what Bloomberg suggests. Bloomberg believes that the price war that Tesla is creating is going to significantly hurt Tesla as well. It's not like this video is just to say Tesla's gonna be good.

it's gold and everything's fine. It's unfortunately not great. Even though Tesla has the highest likelihood in my opinion of being one of the winners in the EV space, it's going to get Shrugged through the mud. It's kind of like going into the pig Den beating up all the other pigs and you're still muddy and stinky and full of poop.

Even though you won, you still kind of lose, right? So Bloomberg suggests their first estimate at gauging how much of a margin impact we're going to see at Tesla is about 380 basis points to consensus gross margin. However, it could be as high as 450 basis points. that could end up being offset by more operating leverage, lower raw material costs maybe the introduction finally of the Cyber truck, but at least in the near term, you're expecting to see a margin hit a Tesla even as it likely gains market share from the competitors. In Fairness here: Bloomberg actually hands it to Tesla and suggests that look Tesla is actually pretty competitively priced against cars like the Mercedes GLC or the Mach E.

And the biggest ones to be worried about are companies like Rivian and Lucid who are bleeding cash. At least companies like Ford and GM have balance sheet flexibility including Honda, but balance sheet flexibility just means I Guess we can lose money to try to survive and keep selling some EVS so we don't get completely beaten out of the market. But look at this: price comparisons from Fisker show that a Tesla Model Y at its new 53 000 price is very competitive to a Maki or a Mercedes GLC Before any potential tax considerations like tax benefits for the EVS Thanks to the inflation reduction act, that's actually a really good Plus for Tesla Because now with its new pricing, we expect Tesla's going to be able to take advantage of a lot more of that sub 55 000 full 7, 500 tax credit see: Tesla's full self driving is is actually build separately from the base model of the vehicle and even though you might be able to include FSD in your financing, it is not included as an optional upgrade for the purposes of determining whether or not you could get the tax credit. That actually potentially means you could have a lot of Tesla buyers who say wow, I'm paying fifty three thousand dollars for the car.

how much is FSD Oh, 15 grand? That's a lot. Oh, but wait. I get a 7 500 tax credit maybe Now do I want to buy FSD maybe and it likely will increase the take rate for FSD, especially since now people can actually get the full self-driving beta in a wide release. That's great and once again reiterates Tesla's ability to just beat up the competition and take more market share.

So so far we've talked about the fact that Tesla is bankrupting companies, We've talked about them potentially bankrupting used car dealers like Carvana. and we've also talked about about Tesla's potentially shrinking operating margin even though that means they're going to be kicking the competitions. But in terms of market share. So what is that shrinking operating margin look like? Well, if we take the Bloomberg estimate of a reduction of basically three to five percent on Tesla's operating margins, what we're going to want to do is probably take Tesla's present about 27 to 25 margins and drop these to probably to be safe about 20 percent.

So we're going to say the gross profit on Tesla vehicles is only 20 percent. That's an 80 percent cost, right? And let's use a forward projection of a forty seven thousand dollar Revenue per vehicle with 4.2 million Vehicles by 2025, which obviously could be vastly off, but we think is relatively reasonable, especially with the gigafactory expansion we're seeing. Now if I assume a 19 take rate on FSD which is, in my opinion, low because that's what what we had in 2020, we had a 19 take rate that could be higher in my opinion closer to 30. But let's go ahead and assume 19.

That probably puts our fair value for Tesla at a PEG ratio of 1.67 at about 481 dollars per share at Tesla today, around 120. that represents about a 59 compounded annual grade of return over the next three years as we get out of a recession. Again, let's go ahead and be generous though here to valuations and remove Tesla FSD completely. Let's assume Tesla makes zero money from FSD and margins are 20.

You're still looking at a company that should sell for 350, and if you think a PEG ratio of 1.67 is too high, let's go with a PEG ratio of one at a 30 growth rate. That would be a 30pe ratio, bringing you still yet to a 210 dollar price Target or a 2 20.6 percent compounded annual rate of return for the next three years. So even with this margin compression that Bloomberg is projecting Tesla looks like a steal of a deal. And there's a reason why.

it's one of the largest positions in my personal portfolio though I Want to be realistic? There is bad news. Now there are some nice things like Morgan Stanley says we believe a floor in earnings must be reached before investors get comfortable with the floor and the valuation. Now the reason I say that's nice is because we have an earnings call coming up in one week from Tesla I Personally agree with this analysis that it's quite likely in my opinion that in one week once we actually get those Tesla earnings, whether they're good or bad, will actually have insights. and usually what happens is when you get answers and insights on a company or on any kind of negative Catalyst Some element of fear goes away and you potentially unlock buying.

Morgan Stanley May maintains an overweight rating with a price target of 250 dollars on Tesla They suggest that the global EV Market is experiencing a transition from under Supply to oversupply and they believe that 2023 is a year during which execution on manufacturing costs and Supply Chain management will separate the winners from the losers. I've just broken down quite a few losers and shown you why Tesla wins in almost all of these categories against all of the competitors. Whether it's sales prices or its margins or its net income, Tesla wins across the board Capital Self-sufficiency may also be tested during a time of negatively reset expectations over the next few years. This is a way of saying if you're not making cash flow and you have to go to the market to raise money, you're going to end up like an Arcimoto where you're down 60 percent in just a day because you had to dump a bunch of shares on the market just to be able to survive.

That is a problem. But not only that, it's worth looking at. Analysis from: Goldman Sachs Goldman Sachs talks about the recently reduced prices in several geographies, including the US Europe and China anywhere between six to twenty percent, and they suggest that while reduced prices for the model 3 and Y help the company better address the 20 to 30 percent of vehicles sold in the market between the 40 to 55k range, basically opening up your market share. Ultimately, the price Cuts May imply that orders were tracking more weekly than expected.

Therefore, Goldman Sachs is lowering their EPS projections and they're reducing their average selling prices. Now, they've already been lowering their expectations for earnings per share and the growth rate for Tesla, but now they're lowering lowering them even more. Despite this, Goldman Sachs believes that even though we're going to have lower earnings in the near term, they think they're going to see Tesla take more market share, which is what we've been talking about. and they think that Tesla's new factories including Austin and Berlin will end up having margins that closely resemble Shanghai or more closely resemble Shanghai Then they resemble Fremont Shanghai.

We know to have very, very high margins and so Berlin and Austin ramping should help increase margins for Tesla rather than only seeing margins go down thanks to price. Cuts This is what happens when you scale. Maybe that'll happen for Rivian and Lucid as well, but they have a long way to go to even make a dime of profit. They're not even close yet.

They also think that Tesla's ability to make a profit while lowering prices basically wrecks the competitors in their opinion. This is something we talked about earlier as well. So it's not just me me saying it. now.

their earnings per share estimate is only three dollars and fifty cents for 2023.. Now that actually makes Tesla look a little bit more expensive than usual because if you look at three dollars and fifty cents at about a hundred and twenty dollars a share, let's say that puts you at about 34.2 times price to earnings ratio for for 2023. and if you have a 30 gross Target or growth Target for Tesla that actually puts you somewhere around a PEG ratio of 1.13 Most people have a price or growth Target I should say for Tesla of around 40 percent. Uh, in which case, you'd be at a PEG ratio of about 0.85 if you have a pay or a growth Target Eventually for Tesla of 50, you'd actually be at a PEG ratio of only 68..

So it all comes down obviously to your growth. Target for Tesla In addition, Goldman Sachs believes that the recent weakening of the U.S dollar mitigates some of the damage of the international price reductions. You have to remember that Tesla sells or receives about 45 of their revenue from the international market. That was really bad in 2022 when the dollar was strengthening, but now that the dollar is plummeting, it could actually be a Tailwind for boosting Tesla's margins and profits.

And what I actually like to see is substantially declining profit estimates because it makes it easier for Tesla to beat them. Consider the following snapshot that's been circulating on social media. You could see that 12 months ago we had let's see here: this is the EPS adjusted measure for Q4 And then this over here is our EPS 2022 measure. Let's just stick with the Q4 2022 earnings estimate and you could see that six months ago we thought number the earnings would be about one dollar and 24 cents.

That has then steadily declined. Actually, it went up to 129 there for a hot minute three months ago, but then declined back to 124, 116, 114. and the current estimate is only a buck 13 for Tesla EPS. So if you're trying to track what that EPS comes in at for the fourth quarter for, when those earnings come out, the current estimate is declining by the day.

Right now, sitting at just 1.13 If we look at the 2022 adjusted earnings per share, we're sitting at a current estimate of about four bucks. And so if you wanted to use a trailing PE measure for Tesla, you would take about 120 for the share price divided by four and you would see that Tesla's selling for about 30. x. Now I Know you might say, wait a minute.

Like, isn't that less than what Goldman Sachs was predicting? Yes, Goldman Sachs actually includes only about four dollars uh of of eps for Tesla If you exclude SBC for 2023 stock base Com or 350 for 2023. If you include stock based call. That's insane. Think about that for a moment.

The consensus estimate for 2022. Okay, 2022 consensus estimate is four dollars. You can see right there. four dollars period 2022..

Simple, that is wall. Street's consensus estimate Goldman Sachs is actually 50 cents lower than that for the next year's earnings per share. In my opinion, that's actually great news because it's a sign that Wall Street once again is probably going to be really wrong and it's going to be quite bullish for Tesla. Now do keep in mind though, even the Wall Street average estimates which are more bullish than Goldman Sachs have growth of the following for Tesla thirteen percent next year 31 percent the year after 28 percent the year after in earnings.

That means that Wall Street actually thinks Tesla's only going to grow their earnings per share at an average. This is wild. Okay, Wall Street thinks Tesla is over the next three years only going to grow at an average of 24 percent. This is despite the goal of the company to grow at 50 percent and Tesla in a hard quarter going at 41 percent.

So you could see Wall Street is pretty bearish relative to the company's estimates. Now, if you don't think that Tesla is going to grow 40 or even 30 percent, yeah, you might align more with Wall Street or even Goldman Sachs. But the fact that Goldman Sachs here for 2023 is actually looking at what to me looks like a negative EPS absolutely blows my mind Now just to make that crystal clear, because I know it's like hard to imagine that Goldman Sachs could picture zero growth for Tesla over the next year. Look at this chart right here: EPS Projections 3.48 cents for 2022 3.50 for 2023.

Yeah, Goldman projects no growth. That's insane. And this folks is a company that has a 200 price. Target Goldman Sachs has a 200 price target for Tesla but assumes zero growth over the next 12 months.

How freaking insane is that? Hey, you know what? in the short term, you know what they say. In the short term, the market is irrational and it will remain irrational longer than you can remain solvent. But in the long term, fundamentals tend to win. and this is why we regularly talk about fundamental analysis in my Programs on Building Your Wealth In our course member Live Streams Real Estate Investing Stock Investing Do-it-yourself Property Management making YouTube videos being a YouTuber being a real estate agent, increasing your income and our Hustlers course, you name it.

Next, we have to talk about how Hertz is actually now interested in buying 25 000 Tesla and poll stars to rent to Uber drivers for about 334 Euros per week. Now that's actually quite interesting because it means that even if consumer demand slows down, if the prices of these EVS come down, you could end up finding that rental car buyers even during a recession might end up swooping in to pick up the inventory. So far, it looks like that's exactly what's happening. We have to talk about how Twitter could potentially affect Tesla Unfortunately, Twitter has to start making payments at least according to the Financial Times on about 1.5 billion dollars of annual interest expenses.

If we look at the 2021 annual report for Twitter, we could see they brought in revenue of about 5 billion dollars. yet they had losses of 221 million dollars. So somehow you could make five billion dollars and still lose money. That's pretty disappointing.

But anyway, the company lost money. Wow. Uh, and we know that their revenues per quarter if per quarter revenues were about 1.27 Let's say we know that their revenues right now were down by about 40 percent. Which means this is a company that's probably making somewhere around 762 million dollars in Revenue right now 762..

If they have to pay 1.5 billion dollars in interest, that means they have to pay 125 million dollars in interest per quarter. Unfortunately, their expenses were insane. Even if you take out the probable one-time litigation expenses here, you're still sitting at about 4.8 billion dollars in annual expenses. divided by four puts you at about 1.2 billion dollars in expenses.

Right now, the company only makes about 762 mil. That would put them way upside down. But since Elon Musk cut about 75 percent of the company out, Let's just assume they're about 75 expensed out right now. Their expenses, instead of being about 1.2 might be actually closer to 300 million dollars.

Ah, wait a minute. That's actually potentially good news, because if their revenue is about 762 million dollars a quarter, assuming we could take the 2021 numbers and divide them by four and then take off 40 percent, we're at 762 of Revenue per quarter. We're at negative 125 per month. Which means we're at negative 125 times.

3 for the quarter, right? Minus 300 mil for surviving expenses, What do we end up with? We end up with let's take the little handy dandy calculator here and see if there's any more risk. 762 minus 125 minus 125 minus 125 Minus 300 Oh my gosh Oh my. Lord They could actually potentially be positive by 87 million dollars. So e even though this entire Financial Times piece is a my opinion a pretty big fud story on how Elon Musk could potentially have to default on the debt and then he would, uh, have to go bankrupt and he could try to force renegotiating.

Uh, and and he could try to re-imp improve his position by negotiating with Bankers under even the threat of bankruptcy or he could try to take out more margin loans against Tesla or he could try to raise more Capital which is exactly actually what they've been trying to do. If the numbers are right, Elon should actually have been able to get his cost down to where the company might be soon able to run at a break, even even if we just assumed Elon Musk set aside three billion dollars of stuff he already sold for Tesla stock and assume that uh Twitter runs out of 250 million dollar. Negative: That's like taking another 20 or like another third off of the revenue that I assumed for for uh Twitter based on reports that we're getting okay, public reports are showing Revenue declines at Twitter of 40 to 35 percent. Okay, if we take off another 250 here, we're probably more like uh assuming a 55 to 60 decline.

Even in that case, Twitter would be able to survive another 12 months using three billion dollars of Elon's money. This is where I actually believe that Elon's confidence in saying he will not have to sell in 2023 sell more Tesla stock is actually accurate. So I give Elon a pass on that Now 2024, all bets are off. He could go back to selling even though he says he hopes he won't have to sell until 2025..

Unfortunately, then we have even more bad news: the lawsuit over the Tweet funding secured. Long story short, in August of 2018 Elon Musk said taking Tesla private at 420 funding secured. He ran his math assuming that Tesla is worth about 419 dollars and some odd cents and he rounded it up to 420 for Good Karma He was doing so under the premise that the Saudi private investment fund would be willing to commit to funding the deal at 420 per share. Unfortunately, those were just talks and in an interview with the New York Times Elon Musk kind of walked himself into a corner when he basically said yeah, the deal wasn't a commitment yet, it was just talk that led a judge in California named Edward Chen who's the same one hearing the fraud case starting today to say quote No reasonable jury could find Elon Musk's tweets on August 7 2018 accurate or not misleading.

This is the same judge who rejected Elon's claims to move the Tesla fraud case that Elon Musk tweet fraud case to Texas despite Elon's claims of bias in the jury pool due to all of his layoffs at Twitter now one of the jurors or potential jurors was interviewed I don't know how they pulled this interview off, but apparently or maybe maybe this was reported through through attorneys. That's probably the case because attorneys interview jurors. But anyway, one of the jurors apparently said that Elon Musk comes across as arrogant and narcissistic, but they believe they could put that opinion aside in the courtroom and judge Elon Musk fairly because after all, there are times they don't like their husband and you don't have to like somebody to properly judge them. Ah, let me just say that Elon Musk losing this fraud case would not be very good because there is a risk that Elon Musk could lose a substantial amount of money in the fraud case to damages.

Now, it's very difficult to prove damages because since his tweet Tesla's share prices are up 384 percent. but I believe the individuals involved in suing Mr Musk for fraud are individuals who were trading based off Elon Musk's tweet and so now there's going to be not only a jury that decides was Elon Musk wrong for what he said, but then if he was, who decides how much in punishment he has to pay, who decides what those damages are and all that is still to be determined. But if Elon Musk has to pay one or two bill, you better damn hope that Twitter is really cash flow positive. otherwise Elon's gonna have to flip-flop again instead are probably selling Tesla stock to keep both well, his penalties alive himself, alive, his obligations alive, and Twitter alive.

That's a lot of information. so long and short of it if you made it this far. I Appreciate you consider subscribing and sharing if you like this sort of longer video. Please let me know in the comments down below if you want a bottom line of the whole video: short-term bad, long-term good for Tesla stock hashtag not Financial advice And to the person who left me a comment the other day saying Hey Kevin when you say I'm a licensed financial advisor and I run an ETF and I sell programs on selling or on building your wealth uh, you shouldn't say that.

Oh and final message to the person who told me that I should not say things like I'm a licensed financial advisor and even though I sell programs I'm building your wealth and I run an ETF an exchange traded fund, this video is not personalized Financial Advice: No I'm going to continue providing that disclosure disclosure because I think it's very fair and reasonable to the audience to know that. look: I am a financial advisor I do sell courses on building a wealth I am an investor in Tesla stock and I run an ETF which may or may not have Holdings in particular stocks that we're talking about. So I'm a big fan of more disclosure rather than less. but thanks for the feedback I see it whether I like it or not.

thanks so much! Goodbye!.