Oh my gosh, you won't believe what was just said in the Tesla fraud lawsuit against Elon Musk and it has huge implications for who might win this case. We're going to talk about that in this video. We're going to talk up not only about the quick backgrounds of The Facts of the case, what was said in the case, my opinion on that, but we're also going to talk about Tesla margins, the potential for its price change or or how much its valuation might change because of those margins. We'll look at what Sandy Monroe has to say about those margins, and we'll also look at a clownish comment from Oh I gave that one away from the mainstream media about Tesla With that said, let's get into the video we already and don't have to reiterate of that in just nine days, your lifetime access and opportunity to use a coupon code to get into the programs I'm building your wealth does end.

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So let's go ahead and start with the lawsuit. Look quick background on the case. We know that Elon Musk tweeted on August 7 2018. considering taking Tesla private at 4 20 funding secured, he later that day responded and said investor support is confirmed.

The only reason why it's not certain yet is because it's contingent on a shareholder vote. So he makes a pretty large claim here that hey, like this, we've got everything we need to make this happen. Problem is: Elon Musk Was interviewed by the New York Times and on August 13th disclosed that the only reason he thought that funding was secured was because he had been in communication with the Saudi Arabian Sovereign Wealth fund over the potential of taking the company private. However, that was far from a certainty and the SEC ended up suing Elon Musk for misleading or making misleading statements.

Elon Musk ended up settling with the SEC and paying a 20 million dollar fine and agreeing to let someone at Tesla or his company's babysit Elon Musk's tweets before Elon Musk sends them. I Personally doubt that's actually happening, but that was part of the settlement. Elon Musk suggests that he was forced to lie in settling with the SEC that he misled investors because otherwise he would have gone bankrupt. That's because Elon Musk says the banks that were providing credit lines to Tesla at the time were threatening to shut those credit line down, choking off Tesla's funding sources to survive during a rough time in 2018 during the model 3 ramp and Elon Musk had no choice because he felt like there was a gun to his child's head and he had to settle with the SEC even though he didn't want to.

Elon Musk Later went on to call the SEC bastards for this instance. Now, Elon Musk is being sued, which puts millions of or potentially billions of dollars of Elon Musk's wealth at risk because of the Tweet he made suggesting he might take Tesla private at 4 20. And we know that because Elon Musk uses Tesla shares as his piggy bank, it's entirely likely that the outcome of this case will or could affect your wealth if you have any of it exposed to Tesla shares. So what happened in the case? Well, Elon Musk took the stand about seven minutes after sending a tweet, which some folks are commenting is kind of funny because Elon Musk is making it very clear that he tweets a lot and he's sort of setting that up as a way to potentially water down that his tweets actually affect the stock market.

In fact, during his testimony, he says, look, there's no causal relationship between his tweets and the stock and the stock goes up all the time as well as goes down down all the time for various different reasons and he has little to no control over that. Instead, he takes the very California attitude that look tweeting is a great way to communicate with retail investors and it gives people Democratic access to his thoughts and that the things he say it says on Twitter should have little to do with well Tesla stock price though. let's be clear when Elon Musk tweeted a few years ago that Tesla stock too high and the stock quickly sold off eight to ten percent I was one of the people buying the stock and I know this because I was actually in the middle of a course member live stream during that tweet. In fact, if you go to the date of that tweet and you go to the date of my course member live streams, you will see me going.

This is hilarious! Thanks Elon Musk for the discount and me buying Tesla shares. Thanks for the discount! Elon Now so I do think there is an argument to be made that some of the things Elon says leads the stock price to move. Just like his going private tweet ended up leading the stock price to Rally roughly 10 percent in the days after his taking Tesla private tweet. So whether or not Tesla stock is moved by Elon Musk probably doesn't matter as much as the allegations by class action investors who are suing Elon Musk for his tweets and what I think is fascinating is the testimony given by the lead plaintiff in this case.

But before we have to or before we look at the lead testimony I Think it's useful to understand a little bit about what happens when a stock goes private. Let's say Tesla stock is 330 dollars pre-split Remember Tesla stock split once 5x and once 3x. So let's say the stock is 330 dollars Old school pricing and let's say Elon Musk says hey, I'm thinking about taking the stock private at 400 and 120 dollars. Well, in this example, you're out of the stock would be upon the stock going private and you would receive four hundred and twenty dollars for your shares presently worth three hundred and thirty dollars.

The stock market on these sort of rumors tends to rise and the more likely the deal is to happen, the higher the stock price tends to go up to 420.. let's say the stock price Rises to 389 dollars. The difference between 420 and 389 represents the risk that the deal does not happen at 420 And some people say hey, if I think the deal is going to happen I have an Arbitrage opportunity of thirty one dollars. Which means you can buy the stock for 389 knowing you should get 420.

of course, if the deal doesn't happen, then you don't get your Arbitrage opportunity right. Then you're making a bet on Tesla stock. So some people then argue that well, if I hold the shares at 320 and I think the stock is going to go to a thousand dollars, then 420 is an arbitrarily low cap for me. In other words, you would only make about ninety dollars in profit.

Poor you? That represents about 20. And maybe you're kicking and screaming because you just didn't get as rich as you could have gotten. Well, that kind of argument probably wouldn't get a lot of sympathy since you'd be making money anyway. So let's try to understand the argument of the lead plaintiff in this case now that you understand a little bit, the mechanics of how the stock market can move when stocks are potentially going to go private.

Well, the lead plaintiff in the case Mr Littleton had the following to say: this is straight from: Bloomberg Littleton The Tesla investor and representative of all investors in the class action suit was the first witness to testify. Littleton who says he grew up on a farm in Washington says he first read about Musk and his SpaceX Venture and found the Billionaire's ideas compelling in 2015, which is also when he began investing in tooth in into Tesla stock. although that was later corrected by his attorney to indicate that the individual had actually been investing in Tesla stock since 2012, which let's make it very clear means he was up a lot of money. Furthermore, Bloomberg says Musk's funding secured tweet was quote so definitive or definite to him.

He testified and those words were the quote driver that pushed him to start a days-long liquidation process where he sold his Tesla position which was nearly 100 percent of his portfolio but with some options as a hedge. So in other words, the guy who is leading the fraud lawsuit against Elon Musk is really making the argument that he had to sell his Tesla shares after Elon Musk's tweet, which given that the stock ran up about 10 to somewhere between 360 to a high of 389 dollars After the Tweet Given the run in the share price, it's arguable that the investor actually benefited about 10 from that, and potentially if the stock was going to go private would have benefited yet another about 10 percent. The investor is making the argument that well, because of the tweet, I had to sell and take a smaller profit than I would have if the stock would have been able to run to say a thousand dollars. So in other words, the guy is literally going up in front of a San Francisco jury saying I'm mad I didn't make more profit.

But this is where things get ludicrous after the individual liquidated his shares, Tesla stock price ended up falling about 10 percent between when Elon made the tweet and when the individual roughly and approximately because we don't know exactly where he sold, but roughly in approximately when he sold. So the stock actually fell back 10 percent. which means the individual could have re-bought his shares at a lower price 15 days after. Elon Musk's first tweet Elon Musk says, you know what, we're scratching the idea, we're not going to take Tesla private at 4 20.

that now removes the artificial price cap on Tesla stock and the individual once again could have bought back his shares at a discount to where he sold. And remember, this person had been investing in Tesla since 2012 because he found the ideas that Elon Musk had compelling. So this person is going in front of a San Francisco jury saying all of the ideas about Tesla being a compelling investment were ruined because Elon Musk made a tweet saying that maybe the individual would make a profit on the stock, but not as much of a YOLO profit as the individual hoped to make and because of the back and forth, the guy never wanted to buy Tesla stock back at a discount and now now from the August of 2018 instance, missed out on the 4X rally that Tesla stock has had since then. and now in other words, in plain: English the guy leading the fraud lawsuit against Elon Musk is pissed that he made a profit on Tesla stock and that if it went private, his projected profit would have been less than hoped.

but when it didn't go private, he was so disillusioned with the brand that he refused to buy the stock back at even more of a discount because now he was confused by the tweets and the stock ran. Forex In my opinion, between just just you and me, okay, this guy's an effing clown. You're going in front of a San Francisco jury saying you're sad you didn't make as much profit as you could have and when you realized that profit potential came back, you didn't even take advantage of that potential opportunity at another discount. This is the most clownish lawsuit argument I could ever potentially imagine personally.

I Think that opening statement from the lead investor in this class action lawsuit just sealed the deal that Elon Musk is good. Anyone who basically traded the stock needs to take accountability for their own actions. That's a big deal if you bought Tesla because you thought it was going to YOLO up to a thousand and then you paper handed because you were only going to make a 10 profit. and then when the ceiling went away and you could have gone back to a thousand dollars, you didn't buy back in at a discount because now you were upset because Elon sent confusing signals.

You need to take responsibility for that and you're a clown, That's my take. I Think this person is a clown. The only person who is a bigger clown than that lead investor in my opinion is the person who replied to my tweet. My tweet was the following: Let me get this straight.

The guy leading the class action fraud lawsuit against Elon Musk testified he lost Millions because he started selling at selling Tesla at under 390 dollars because he was convinced Musk would take Tesla private at 420 which remember would be a profit in that case makes logical sense clown and then I received the following reply yes meaning he thought the upside of the stock was simply 420. Oh yes, a simple profit. It's not hard to understand that he was manipulated into believing the upside was only 4 20. Come on, Kevin You're better than this, right? Because the idiot could have bought back at a substantial discount and made another profit and stuck with the Forex and that original compelling Vision but didn't because yes, he was manipulated and he's too small of an individual to take accountability for his own actions.

But then again here: I am reading criticism from a clown who has a profile handle Silverback ape ape, emoji and an ape as their profile picture. This person is probably following me because I argued back when the ticker symbol ape was eight dollars that it was a screaming cell and that Adam Aaron was tricking retail investors and you should as quickly as possible dump these shares because they'll probably go under a dollar and even if they didn't it would go down substantially. And what ended up happening I because I had ape shares because they were given to me by AMC as AMC shareholders I dumped the shares immediately at over eight dollars and what happened? The shares plummeted to 65 cents. Sure, they're a buck 70 right now because they're going to get converted to AMC shares, but it is still a substantial loss from eight dollars.

So I'm sorry that the clowns are still offended by my projection and warning that Ape stock was a rip-off and now they're trying to clown me calling this other person the clown. There's a lot of clowning around that goes on in the stock market, but the good news is I like Tesla stock just like Sandy Monroe does well. We don't know that he likes the stock, but at the very least he likes Tesla's margins. Sandy Monroe Just published a phenomenal video where he talked about gross profit margins for Tesla And what's fascinating is the last analysis that we did on Tesla stock was, in my opinion, relatively bearish.

What we did in the last analysis is we tried calculating a relatively worst case scenario for Tesla and I Understand, you could make this case even more worst case, but I think it's already pretty brutal. It claims that Tesla would sell vehicles for an average of forty seven thousand dollars per vehicle, and that the number of vehicles Tesla would produce would be about 4.2 million in 2025.. that's actually a relatively low estimate and would suggest that their growth rate is slowing substantially now. We also suggested no full self-driving revenues and that Tesla would only make an 80 or run basically an 80 expense ratio so only would make a 20 gross profit mark margin.

In this example, with only a 30 times price to earnings multiple, we see that Tesla at the time of recording this analysis was essentially a double by 2025. 210. Although these are pretty bearish estimates. given that if Tesla does grow at 30 times, that is 30, I should say earnings per share per year, Tesla should be selling for a PEG ratio of at least 1.67 Well, 1.67 times 30 percent growth would bring you to about a 350 dollar future price for Tesla stock at just 20 percent margins.

Sandy Monroe makes a beautiful statement about 20 percent margins. He says that anyone who looks at Tesla's gross profit and suggests that their gross profit should be under 20 percent is a fool. And when it comes to the Cyber truck, he believes that gross margins could be in excess of 37 for Tesla and that their regular vehicle margins should be closer to 30 percent. He believes that Tesla is brilliant for annihilating its competition by dropping its prices.

Now the equivalent Tesla sells for four thousand dollars under the Id4 from Volkswagen which does not have the supercharging network that Tesla does, or this full self-driving capabilities or technology that Tesla has. And so now if you actually consider that margins for Tesla might actually be closer to 30 percent again in the future in 2025, when hopefully commodity prices fully relax and Tesla scale continues to build up, especially if we end up with a factory in Indonesia or Northeast Mexico we go back to a 30 margin for Tesla with no full self-driving Revenue We could imagine that Tesla share price would be back to 585 dollars per share. Now the take rate on FSD was 19 in 2022.. if we're now ridiculous and we take Sandy Monroe's margin and only a 10 take rate for cars sold so 10 percent of 4.2 million, which would be about 420 000.

this would represent 6.3 billion dollars of incremental revenue for Tesla at essentially a 100 gross profit margin. Although I run it at about 98 percent, this would push Tesla stock to about 654 dollars per share. If we increase that gross profit margin or sorry, the take rate on FSD to 20 closer to in line with where it was in 2022, you actually end up with incremental Revenue sitting around 12.6 billion dollars, bringing Tesla share price in 2025 to over 723 dollars. And even if again you say no, the PEG ratio for Tesla at 30 growth should only be one times Peg will reduce this to one times Peg The stock would still be over a triple from today's valuation.

Thanks Sandy Monroe for the Insight Now what is the mainstream media have to say? Well, the mainstream media says that there's no evidence that any of Tesla 6 Price Cuts since 2019 have had or will have any influence over the broader U.S market of domestic automakers. And this is a a piece written by Bloomberg writers who like to tell you that Tesla has cut their price six times since 2019, but mentions nothing over the fact that Teslas are actually more expensive today than they were then because they conveniently ignore that Tesla has raised their prices numerous times since 2019. and they make this argument that well, Ford and GM command more of the overall vehicle segment and Tesla doesn't really matter. And what they do is they take a chart of the total number of sales that GM and Ford have for vehicles in 2022 in the retail market and compare it to Tesla Revenue And they say, well, look okay, retail Revenue in 2022 for Tesla is so nominal.

So why would Tesla's price Cuts have any impact on the competition? Well, it's simple because Bloomberg here is being blind to the fact that Tesla is dominating the EV Market They are including the old school Ice Market where there is shrinkage. In fact, if you look at the revenues for Ford and GM, you see next to no growth or shrinkage in the ice vehicle. Market Whereas Tesla is growing at a 30 plus clip annually potentially as high as 50 percent on growth on total gross revenues, That's a big difference. You have a growing Pie versus a shrinking pie.

On top of that, you've totally failed to realize where the mainstream media at least totally fails to realize the argument that uh oh, if we look at other electric vehicle manufacturers, Sandy Monroe's arguments start looking pretty accurate because if you spend a hundred dollars at Tesla Tesla brings about 14 to the bottom line. If you spend a hundred dollars on electric vehicles in China at Byd, they bring about at Byd, a dollar and forty cents to the bottom line, or about one tenth of what Tesla does. if you spend a hundred dollars on a lucid well, rather than Lucid bringing anything to the bottom line, they paid about 250 dollars to make that. That is the same approximately as the problem Rivian has.

Imagine you had a box and you're like, hey, look at my box when I put 250 dollars in, only a hundred dollars comes out. Yeah, that's test. that's that's Rivian and Elusive for you versus Tesla where that's called Pure hopium that the companies will actually end up profitable at some point because Tesla sits with a box that they don't even have to put money into. Other people put money in and Tesla takes the money out whereas in the case of Lucid and Rivian, they're putting money in the box and getting way less out.

That's embarrassing. Every car they sell, they lose more money. It's kind of like Ford in their electric vehicles. How they can't figure out how to make a profit on EVS Now we'll see who's going to end up being correct, but there is some good news in the short term.

Technical analysis Based on. well, Tesla's chart here has originally looked pretty darn bearish. That's because even a seven-year-old could tell you that Tesla has been facing a nasty downtrend and we don't have to do too terribly much ta to see that that downtrend has roughly broken. All we have to do is draw a very simple line and connect as many dots as we can here.

and we can see Ping near Ping Ping Ping And ooh, we're starting to break the trend. That's wonderful. So everyone can see that Tesla's starting to break a trend, which is nice, but maybe not everyone can see the bullish sign which is a simple inverse Head and Shoulders here is an upside down head with upside down shoulders. Here, and usually a head and shoulders chart is simply a large downtrend on an inverse.

That is a large downtrend followed by The Head and Shoulders pattern. In this case, the inverse because it's upside down which would pretend this sort of movement after or a mirror image of the prior decline. Now, no guarantees and Ta may actually only bring Tesla stock up to say, who knows, maybe 167 some kind of support level. Maybe if we go draw a Fibonacci we can get a little bit of a better idea.

So let's go ahead and try doing that. We'll go to a 4, 14, 50 to 1018. We'll adjust this for Perfection We go to the settings here. very simple.

We'll type in the actual top for 1450, 101.81 for the bottom. And where does our Fibonacci bring us to? Hey, maybe it actually brings us up to 175. and maybe we hop around in this area here. Who knows.

But Tesla seems to have broken some serious downtrends here. Elon Musk's selling volume has substantially been reduced and he promises not to sell in 2023. Maybe not even in 2024. But then again, if he loses this lawsuit against this clown, he might be forced to sell.

So ultimately, nobody knows. But I'm pretty optimistic and well, let's just say check out on that coupon code linked down below and we'll talk more in the course member live streams.