Tesla's Bank Run | Crisis at Tesla.

Tesla stock faces a crisis of confidence

much like a bank run which is almost

what we saw in 2023 in March and what

we're potentially seeing now with New

York Community Bank in this video I'm

going to provide potential Solutions

with a fep plan for Tesla as well as

what you might think as a Tesla investor

or investor in Tesla stock but I want

you to start by thinking about this who

do you think gets sued more doctors who

are nice or doctors who are arrogant it

should be obvious but it might not be

something you've considered before see

even if you're wrong people have

confidence in people they

like so with doctors the reality is nice

doctors even if they're wrong tend to

get sued way less for medical

malpractice than arrogant doctors who

are wrong and the same thing that's true

with doctors getting sued is true with

with banks and Bank runs and with stocks

like Tesla see Bank runs are simply a

crisis of confidence New York Community

Bank went down as much as 14% today they

got hit with their first lawsuit and

Moody downgraded the bank yet the stock

moved positive before the end of the day

the company laid out extremely clear

expectations and plans not only did they

replace their executive chairperson and

said look here's the reality we cover

our bank balances our unsecured cash

balances by 1.6x here are the loans we

have here's exactly how we're going to

cover all of the cash balances we have

so people don't have to be worried about

a bank run we are not going to cut our

dividend instead what we're going to do

is we're going to offload mortgages and

RV loans and we're going to sell assets

as we need to to make sure we can cover

our bills and if we need to raise

Capital we will do that they also

reiterated that there's been virtually

no deposit outflow and that's probably

backed up by the fact that we kind of

have this like Universal guarantee now

from the FDIC that people won't lose

their deposits at Banks which is

essentially what came out of the banking

crisis last year but regardless the

point is the company provided a very

clear plan and even if there is doubt

which there is trust me I look at New

York Community Bank and I'm like I don't

think your RV loans or your mortgages or

your multif family loans are worth what

you think they're worth I dispute that

with the bank I think the bank's assets

are probably worth less but the bank

gave a plan and so notice how they can

be wrong I might be right they might be

wrong but they gave a plan and the plan

provided confidence new person new plan

changes think for a moment about how

this affects investor confidence in a

bank people think that okay maybe now

we're at a bottom maybe this plan is

going to work there's hope there's a

chance I'll give you some examples here

so we could see how the bank run that

occurs at Banks is really no different

from the crisis of confidence that's

occurring at Tesla consider for a moment

Bob chac takes over at Disney during

covid for a couple years what happens we

start seeing the failure of Disney with

this fear that Disney's mismanaging

their relationship with Ronda santis in

Florida potentially mismanaging

expectations around the company's brand

woke anti-woke this that whatever what

happens we remove Bob chac from the

executive position and bring back

somebody who did great things for Disney

Bob Iger whether or not you agree with

that doesn't matter the point is the

company did better then than it was

doing now and so we went back to a

period of confidence Ence consider the

executives at NAS they provided terrible

numbers really bad

numbers and I'm not very confident in

the numbers I got about the future but

they made the argument that q1 might be

the bottom q1 might be the bottom what

happens when they suggest q1 might be

the bottom the Stock's up 16.9% on the

day investors feared that CVS you know

the local drug store investors feared

that CVS would have substantially higher

medical costs due to the insurance

warning they gave but they said they've

managed the risks the risk gone away or

went away and the stock went up because

we provided confidence Baba fell 6%

today about it was like

5.9 because they suggested they were in

a challenging market and provided no

hope when there was no hope no plan no

confidence the stock fell 6%

snap beat earnings but their loss

2.3x on guide and no plan on how they're

ever actually going to go long run

profitable what happens stock down paler

beats the stock goes up not only 30% on

one day but what happens the next day

they're up another 7.9% the Stock's now

at

$23.60 I opened a position on this in

about the 18s and people like Kevin

Kevin that that seems high for pound

here I'm like here's my fundamental

analysis here's why I think the stock

will do well what do we get from the

company beats with excited

guidance STS way

up guidance is critical because it

instills confidence in the vision people

have to have hope whether you think back

to 2008 the hell of a recession we were

going through whether you were a

Democrat or Republican the reality is

people had hope that there would be

change now obviously we can argue the

changes and what was correct politically

but it doesn't matter people vote on

hope that's why today Donald Trump is

doing so well in the polls because

people hope that things will be

different that inflation will go away

that prices will come down and the

reality is prices aren't going to come

down unless we're in a deep dark

recession joean PO says the same thing

so as Finance folks we know that but

people have the hope that things will

just feel better if we just change who's

in office a lot of people do okay and

that's just based on polling today when

you match up Trump versus Biden most of

the polls suggest Donald Trump would win

right that's today things will be

different then maybe but the point

is in the stock market Securities are

sold not bought literally the Security

and Exchange Commission told me that

there's a reason why the Securities and

Exchange Commission the SEC suggests we

stand for proper

disclosure and marketing rules they're

not telling you if an investment is good

or bad

they want to make sure that companies

that give hope give balanced hope hey

like you could be hopeful but are you

providing balance right that's the point

of the SEC to make sure that there's

proper disclosure they're not telling

you what's going to be a good investment

but think about that for a moment when

people hear me say that they're like

Kevin Kevin what do what do you mean

Securities are sold not bought I mean

like there's a buyer and a seller yes

that's a different kind of selling see

there's buying something so I'm going to

buy this cup now I have the cup I'm

going to sell the cup now I no longer

have the cup okay it's just like I'm

going to buy or sell a Tesla I buy the

Tesla I have the car I sell the Tesla I

don't have the car but there's a

different kind of selling and it's

called sales so what if now I'm the

broker for this mug hey did you know you

could get this mug at lego.com they've

got about four different varieties in it

and this cup while you might not be able

to tell from where you are but it holds

a large amount of coffee so I have to

get up one less time every single day to

get my energy intake from coffee so I

can remain more productive in the office

more productivity in the office every

single day probably 10x is the value of

this cup this cup is an investment it is

not a cup it is a money

printer okay that's sales now you might

think ah sales sales is sleazy sales is

trying to like manipulate me and

convince me really what I said is a real

reality of efficiency or productivity

sales is actually simply

informing somebody of potential value

and sales is not supposed to be hey

here's a gun buy this okay that's

or lying or forcing sales is

actually providing value and information

consider this when the CEO of Nvidia

says we are entering a new era of

computing and not only are we entering a

new era of Computing where we're going

to essentially rebuild all a uh server

Stacks uh with an AI mindset but we have

a moat called infiniband and we will

wire your entire server Network for you

we will sell you the cabling we will

sell you the switches we will sell you

the gpus we will sell you the

stack that provides hope a plan and then

what do we see earnings after earnings

after earnings Nvidia executes on the

plan they suggested

that builds confidence that what they're

saying is not fugazi AMD says hey we

don't have infin ban but you know what

we don't need infin ban because we're

going to work with broadcom and Cisco

and create the

ultimate ethernet Consortium which is

your direct competitor to infiniband and

we are going to be able to use our

products in existing environments and

new environments why saturate yourself

or bog yourself down into sort of the

ecosystem that is infiniband when you

could use ours which is faster and

cheaper to deploy and it's just as good

or better in their own argument whatever

you provide value on the metrics where

you think you out compete right and then

that's on the end user to defi decide so

why is it then that Tesla stock is down

for the last three years essentially I

mean if you take today and go back three

years you're negative you've been on a

downtrend for essentially the past 3

years it's basically flat over the three

years is the nice way to put it is is

this just a bad stock is is it over is

this company bad well in my opinion it

has a lot and everything to do with

allocation specifically institutional

allocation institutional allocation to

Tesla is the lowest out of magnificent

seven and of those who do allocate Tesla

is the lowest within their positions

it's very rare to have somebody have a

large allocation to Tesla and it makes

sense because those who do are actually

making a contrarian bet why sell a fund

That's Heavy in Tesla if that's a hard

sale to make all you have to do today is

go hey look at Nvidia and Eli Lil these

companies are killing it want to invest

in my

fund easy sale the Stock's been up

confident product confident executive

staff clear plan hope communication sky

is the

limit what do we have with Tesla well

virtually the opposite consider this for

a moment you have a who has been alleged

by a judge who in my opinion unfairly

but did essentially Rob Elon Musk of a

$55 billion pay plan that was approved

by over 80% of shareholders which was

the majority of the non-majority

shareholders that was wording from the

lawsuit don't worry about that being

confusing the point is a judge suggested

that Elon Musk was distracted by other

Ventures like SpaceX and Twitter and

maybe this wasn't actually fairly

disclosed to shareholders you have a CEO

who's accused of doing party drugs with

with board members who contributed to a

stock comp plan's creation you have a

company that responds to press inqueries

with a poop emoji you have the stock

performance that's not helping you and

you have no guidance in fact you've just

removed guidance you lost your CFO wait

a minute why did the C CFO Leave Nobody

Knows Why the CFO left people speculate

well speculation creates uncertainty

uncertainty is scary uncertainty means

fear uncertainty means I don't know I

don't have an answer I I I want to be

away from this I don't feel happy

here you have a company that provides

not only no guidance on sales now which

is odd because they always do so you're

actually going the opposite direction

you're going from giving guidance to

giving no guidance but there's no

guidance on margin on vehicles on

vehicle road map their ideas there

speculation but how is a fund manager

supposed to sell a fund with an

allocation to Tesla stock when you have

all of the when you basically have the

company unsell itself see advertising

isn't just for the car it's selling

sentiment it's selling positive emotion

consider Coca-Cola it sells a brand it

doesn't tell you swipe up link down

below buy cocacola it sells you a

Feeling Good Feeling happiness it's kind

of like when I talk about hey do you

want to become a millionaire you want to

go zero to millionaire in real estate

I've got a course for that Meek

heaven.com what would it be like if you

were Financial

free imagine being financially free and

how real estate could get you to that

the point is that's one way to sell

emotion Tesla's not really doing that in

fact the emotion that Tesla has

consistently advertised towards or I

should say branded towards has been the

25 to 45y old guy but that audience is

already convinced how many

moms how many moms think about this

realize that the safest vehicle they

could put their child in when they take

their kids to to school or dads who take

their kids to school whatever how many

of those parents realize that the safest

vehicle that child could be in is a

Tesla when I take my family somewhere I

think to myself Lauren we need to take

the Tesla and not the Sienna because

it's safer we're going to not only have

a co-pilot and FSD but the vehicle

itself might perform better in a

crash what do you get when you bank at

JP Morgan during a banking

crisis you get at least hope that JP

Morgan's going to get bailed out by the

Federal Reserve that your FSD is better

that your safety is better right JP

Morgan during a banking crisis is

literally the mop they go around and mop

up other Banks J Powell calls JP Morgan

yo can y'all buy First

Republic and we'll back stop 85% of

their assets so if you lose money commit

to a certain percentage of loss we'll

back stop the rest tax tax payers are

backing it but the point is that

instills confidence in a JP Morgan so

you don't have a bank run a JP

Morgan so what do you have a Tesla a

confidence crisis everything that I've

just described tells you why the stock

has been down for the last 3 years this

is a crisis of confidence notice that

none of the reasons has anything to do

with interest

rates yes interest rates matter but you

can provide confidence around interest

rates let's compare instead though what

we've

gotten Hey look it's AI day we've got a

dojo supercomputer it's going to be a

huge opportunity so then what do you get

analysts like folks over in Morgan

Stanley okay this bumps the stock 40

bucks There's real pop you know there's

real potential in Dojo maybe it'll be

like Amazon that sells merchandise for

basically a break even but wow all of a

sudden they make a ton of money off of

AWS maybe they'll be an AWS like

competitor okay there's potential here

the smart engineers at Tesla give us

hope that the company is going to

generate a lot of profit in the future

so what do we get on with Elon Musk on

the last earnings

call yeah uh Dojo is a long shot but

it's a long shot worth taking but it's

not very high

probability those were his words well I

can't quantify that as a fund manager I

can't quantify that I look at go bro

something I thought had hope you just

took away you did the opposite you

didn't provide hope and guidance you

provided UNH

hope it's bad now I'm kind of like all

right I I mean I never underwrote Dojo

myself but in terms of actually

providing Share value I just underwrite

uh Tesla from an FSD and and vehicle

point of view and an energy point of

view uh but but other people do Morgan

Stanley's probably like just gave all

this value to dojo and you just pooped

on it you took all my hope away how do

you sell it then now you now the Morgan

Stanley guy looks like a fool because

Elon flipped let's do another example

hey um so we're building uh a factory in

Mexico okay hell yeah all right average

hourly wage over there is three bucks.

50 even if we bump the wages 20% over

there our cost of manufacturing in

Mexico are still going to be half of our

cost of manufacturing in California it's

close to the American Border we've got a

free trade agreement with Mexico we are

going to pump margins with the Mexico

Giga facility two earnings calls later

yeah so we're going to hold off on

breaking ground in Mexico because there

might be a

session Tesla has provided us nothing

but UNH hope that is not a diss on the

people who work at Tesla it is not

suggesting that it's time to sell Tesla

in fact I think I think it's a gift that

Tesla stock has been where it is

but this is a a gift that has a lot of

thorns and right now everybody's been

holding the Thorns they're like yeah

it's a nice Rose man but my hands are

bleeding my financial future by being an

investor in Tesla looks less certain

than if I had just invested in any other

stock NASDAQ S&P 500 Nvidia it doesn't

matter pick almost any other stock

Tesla's the worst performing stock in

the S&P 500 you could have basically

year to dat you could have basically

picked any of the other 499 companies

and done better because you have UNH

hope at Tesla now don't get me wrong

there is a point of view of arguing well

I mean you know the real investors can

see through all this and they can hold

through this you know Elon said don't be

on margin so we going to hold strong and

hold through it and eventually Tesla who

knows might be a$1 thousand stock

because it proves

itself rather than like talking about

how it's going to prove itself but in

the meantime you lost a lot of people

and you probably made it harder on

yourself because the harder it is to

sell the stock that is encourage people

to have owner ship in the company the

harder it also is for people to pitch

the car see people pitch the vehicle

when they're Tesla stock goes up in my

opinion more than when their Tesla stock

is in the toilet there's nothing but bad

news about Tesla in fact then they

recoil they do the opposite think about

that for a moment you have a Tesla you

drive through uh or or you drive up to

someone a friend that you know maybe uh

maybe uh supports Biden and uh and you

have to say yeah yeah I bought that

before all the stuff happened with on

you know it's it's a great car but I

didn't invest in the company because of

the CEO or the stock cuz both of those

feel like they're

downhill well what confidence is that

Inspire the other person to buy the car

think about when Tesla was was going up

and there was clear guidance and there

was a road map people like I've invested

in the I bought the car the car is so

amazing I bought the stock elon's a

Visionary you should buy the car

too

advertising Tesla and providing a road

mapap for Tesla is much more than just

trying to appease fund managers it's

it's helping fund managers create hope

and a guide for their clients and give

their clients a vision and an aspiration

of what the stock could be it's having

other vehicle owners proud of the

vehicle that they invested in they chose

a Tesla because they invested in that

brand people buy a Toyota because they

want the reliability and nobody can

really diss that that is a great

decision you want one of the most

reliable cars ever you buy a

Toyota there's no PR department telling

us that all these recalls people hear

about at Tesla are just software updates

and even if they are just software

updates why are there those problems in

the first place how does that compare to

how many other recalls car makers have

that you have to go to a shitty service

center for the point is there is a

disconnect in communication and in Hope

and guidance that's why Tesla has been

suffering every part of the brand has

been damaged

by a lack of communication or by bad

communication that does not make Elon a

bad person that does not make the

company a bad company that does not make

Tesla stock a bad investment but

hopefully it wakes the executives at

Tesla up a little bit

to everything Kevin said is right and

I'm not trying to Pat myself in the back

I'm just saying we need to change that's

it that's all you need and here are five

steps I'm going to try to spoon feed it

to make it simple here are five things

that Tesla can do right now with very

very little effort to finally provide

hope to the company and to the brand

again number one step number one a video

PR team a video PR team known as from

the office of Elon Musk and it doesn't

have to be Elon it simply has to be

somebody who can present on camera

respond to allegations on behalf of

Tesla and simplify the vision of Tesla

in the face of criticism a response is

better than no response because at this

point we've seen what no response or few

or little responses have done little

communication or poop emoji responses

have led the mainstream media to go wild

with speculation and opinions and it's

unhealthy for the brand of the company

so a simple from the desk of Elon Musk

from the desk of the executive of Tesla

whatever a video PR team it's not that

hard it wouldn't cost a lot of money

number two a safety PR team a team that

says look here's a Tesla that was

involved in a vehicle because who knows

the fault of another driver this that or

whatever the injuries the individual

sustained were XYZ which had this been

potentially a different vehicle the

injuries could have been a lot worse why

were they better in the Tesla well

here's why we have pre-tensioners in the

seat belts we have software updates that

update the response time of uh of the

automated breaking system from X

milliseconds to Y milliseconds here's

exactly what kind of change we've

implemented here are 20 different bullet

points as to why the changes we're

making in safety made this person have

less injuries than they could have had

you don't even have to bag on the

competition just talk about and explain

what the company is doing to make sure

that people survive crashes and are less

injured because crashes are going to

happen promote that this is what I

talked at uh Tesla's uh investor day

about to Elon why don't we tell people

about these things safety is one of the

most important things and you've got a

huge Competitive Edge here promote your

wins number three provide a clear

pricing road map people don't have

confidence in the Tesla of a uh in the

price of a Tesla right now so fix it see

Nas for example lowers its revenues but

maintains margin in fact it's expanding

margin it's basically like look you know

we're we're in a transition right now

we're just going to choose to

manufacture less and we're going to

maintain margins I'm not saying Tesla

should do that Nas uses contract

manufacturing Tesla has his own

manufacturing so you're better off

manufacturing than not okay even though

Tesla's talking about layoffs today but

the point is when there's no confidence

in the road map for price it's very

difficult for people to make the

commitment to invest in a Tesla and for

investors to feel confident that we're

going in the right direction in fact the

amount of people that were com

that oh look the model y price increased

1,000 bucks or whatever in Europe the

amount of people commenting on the

internet going o must be a demand thing

bro Tesla shut down Giga Berlin for a

week actually two

weeks probably a supply constraint with

no change in demand but again these are

things that rather than having

speculation about which it is we have no

communication from

teson it's okay to be wrong but it's not

not okay to be silent and so when people

buy a Tesla now they're like oh price is

going to go down 5K after I buy it so

I'm going to lose the value as I drive

off the lot then the price will go down

so I'll lose even more value there's no

confidence in price because there's no

pricing road map how do you solve that

well you link the price of the car to

interest rates it's very

simple every time the Federal Reserve

lowers rates 25 basis points we are

going to raise the cost of a Tesla

$1,000 as an example or $500 okay so

rates come down let's say uh eight times

uh or 2% we're going to raise the cost

of the vehicle 8 times $500 let's say

that's

$4,000 if interest rates go up another

25 basis points we're cutting 500 bucks

again every 25 BP equals $500 it'd be a

very simple road map because now you

make it clear that what happens with

vehicle demand is in part out of your

control but you will have you have a

formulaic response to it as interest

rates come down we can raise the price

and that can go into margin as if

interest rates go up more the price is

going to go down it's very

simple that would provide a road map and

confidence another example and and I'm

not saying all of these need to be done

these are just ideas right I'm just

spitballing ideas here but lower the

cost of FSD there's no confidence in the

price of full self-driving Elon says the

value will increase over time but the

market disagrees the market values FSD

at about $3,000 look at the used vehicle

Market used Teslas with FSD sell for

about $3,000 more than use Teslas

without FSD lower the cost in line with

the free market when you lower the cost

in line with the free market you can

actually provide confidence in pricing

because you substantiate it if some if

you you go and want to buy a million

dooll

home don't you want to know that other

similar homes are also selling for $1

million or would you rather buy buy a

$1.2 million home like a $112,000 FSD

package that's actually in a $300,000

neighborhood oh well maybe the free

market just doesn't

know doesn't instill a lot of

confidence number five provide a clear

road map for margin expectations and

what investor relations types and

financial analyst should actually be

expecting if you don't give us your

guide on margin then how's anybody

supposed to make projections and it

doesn't have to be perfect you just have

to give something I you could go look

look hey the reality is for us to get to

our long-term Vision we're not going to

be at 30% margin we're expecting to

settle out at 24% margin or 22% margin I

don't really care what the reality is

but give an expectation because at least

it suggests you've thought about it and

you have a goal right now it just sort

of feels goalless lack of confidence

maybe you could even have a road to

Tesla event 2024 where you crystallize

the product road map you reiterate the

$25,000 vehicle some of the specs of the

vehicle is a twood door is a four-door

what's the range of the battery going to

be are you going to get into delivery

and passenger vans even if that's just a

long-term goal what do you think the

margin is going to be on an Optimus

robot when it comes out it provides a

lot of value maybe when it starts

unloading boxes from a factory maybe

that's worth 40 Grand on Amazon and

maybe we can sell that thing at a 40%

margin provides some hope some path same

thing for Dojo so look I want to be

clear I'm long-term optimistic on Tesla

but a lot of the pain at Tesla could be

avoided frankly with

management because right now it's sort

of like just let us do our things who

cares about the stock market but who

cares about the stock market is very

shortsighted because that means you

don't really care about the people who

are investing in your car in your brand

and you're in your stock and the reality

is without people wanting to invest in

your car brand or stock Tesla would be

no Tesla you could have the best product

ever but if nobody wants it it doesn't

matter sales is what's missing at the

Tesla I think this is one of the reasons

you had so much success at Apple you put

a was with the

jobs sales Vision with the Innovation

it's not one it's both why 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 P there financial

analyst and you about meet Kevin always

wait to get your

take