Warning: Game Changer January 1 Catalyst for Tesla Stock.

hey a lot of folks are wondering what's

going on with Tesla stock today at least

at the time of this recording and who

knows it could be up by the time the

market closes because the market has

been so maniacal the market presently is

pricing Tesla down 3.2% and people are

wondering why the first and most logical

explanation has to do with this existing

inventory price Cuts but this is not the

only explanation so we'll get through

the news here so first price Cuts

obviously lead to the impression that

Tesla is going to have lower margin

therefore less profit

and ultimately less margin lower EPS

means a higher valuation for Tesla then

you get valuation compression and oopsy

doopsy not only do you attract more

short sellers who load in shorts when

news like this breaks but it does hurt

some of Tesla's free cash flow now I

personally thought we were going to see

negative free cash flow in the last

quarter we actually did not thankfully

knock gunwood and hopefully we don't in

this fourth quarter this fourth quarter

is going to be particularly challenging

for two reasons number one you've had

the highest interest rates in this

quarter if you look at a 10-year

treasury chart you'll see high the

highest interest rates were in October

for essentially the whole year now

they've come down since then but they're

only back to really what we saw during

Q3 so that means much of Q4 has been

exposed to unfortunately higher interest

rates which is not great because that

directly affects people's ability to

afford a new car so that's not great

combine that with discounting of

existing inventory and the second issue

that I wanted to bring up so not just

the discounting of inventory because of

rates but also the second part what

could be driving the discounting of

inventory see this federal tax credit

says here the $7,500 tax credit can be

redeemed between now and December 31st

that's fantastic but that means you

redeem that on your 20 24 tax return

which means let's say theoretically you

buy December 31st you're going to see

that as a tax credit if you actually owe

$7,500 in taxes right so you have to owe

7,500 in taxes and you have to qualify

for the credit so let's say both of

those things are true you're not going

to see that money until probably when

you do your taxes so like somewhere

between March and

May and then you actually get you know

any kind of uh tax payment or you make

your payment or if you're on extend men

you won't actually see it until October

the downside of that is we actually have

a catalyst Jan one Jan one dealers are

going to start being able to give this a

discount this tax credit as a point of

sale discount which means if you just

wait a day longer to Jan one ironically

you'll actually get that tax credit

immediately versus waiting for it so

those are two big catalysts that are

hurting here the interest rates of this

Q4 and the fact that you're going to get

this rollover and again that is the

dealer EV tax credit so you could fact

uh fact check that if if you want to uh

search for it uh you'll see articles

like this car buyers can get their EV

tax credits upfront at the dealership

now it's unclear exactly how given that

that's a dealership will affect Tesla

presumably that'll apply to Tesla as

well but under new guidance those

purchasing electric vehicles or plugins

that qualify under treasury hybrids or

treasury guidelines rather uh will be

able to start getting these credits

starting Jan one uh Jan one so it's

essentially what we've said here uh

there's a 27 page guidance on this uh

that uh breaks down the procedures for

dealers or essentially manufacturers

selling the vehicle uh so we expect

Tesla will be eligible for this which

again delays people's desire to buy

because again

rates and you're incentivized to wait

until January which it's holiday time I

don't know how many people are gifting

Teslas for the holidays budgets are

tighter now people are spending on other

things and gifts for their family and

such and so as a result available cash

is a little lower and so what's

happening well the hedge funds are

eating it up not only is hedge funds

eating it up at the mainstream media

which we'll talk about that in just a

moment here you go Tesla still hedge

funds favorite short stock after heavy

losses in October and so I think what

you're finding is every time there's a

price cut or any kind of bad news on

Tesla it's very easy for the short

sellers to load on the shorts you can

see here The Magnificent Seven Have Been

Loved by hedge funds but there's one

notable exception they love to bet

against Tesla according to Goldman

sack's latest hedge fund Trend report

Tesla Remains the most popular position

amongst hedge funds as of Halloween

despite the stock having risen more than

90% year to date but then again that

only does you good if you actually

bought the stock January 1st if you

bought it anything before that you're

probably not at a 90% gain right now on

Tesla unless it was quite a while before

that anyway beyond that there is also

the Elon Factor so uh you know I'm not

here to bag on Elon you know I have my

criticisms of Elon but I want to be very

clear I love Elon I'm inspired by Elon

you know I think he's great but I do

have my criticisms of him uh that's I

think one of the things that people like

to come to my channel for is I'm not

afraid to speak my mind and I'll tell

you what I think I'm not holding back

I'll tell you what I like and what I

don't like and uh this is a business

week article so it's like you know very

classic our mainstream news here right

how Elon spent three years falling down

a redpilled rabbit hole this is gaining

a lot of attention right now uh and it

could be another reason institutional

sellers or institutional you know fund

managers are trying to distance

themselves from Tesla because it's not

just people who might not want to buy a

Tesla because they're offended by elaw

but it's also fund managers who have to

justify investing in Elon when companies

like Lionsgate Apple Disney IBM are

cutting their ad spending at the same

time as there is this belief that

Twitter is very right-wing focused and

potentially some people are now

describing it Twitter brain wherein uh

the Twitter platform actually ends up

narrowing your world viw so uh I have a

comment on that H I've actually kind of

been just complaining about Twitter for

a while I use Twitter don't get me wrong

and it's X I know that it's just hard

for me to make that switch so I use x

regularly uh but uh I I I have to go on

X and then I have to balance my usage on

X with looking at other sources because

if I only go on X I will believe we are

going into a Great Depression that

Democrats are the greatest fraud ever

and I know half of you listening to this

are going to be like that's right but I

don't believe that you know I I believe

that there are definitely extremist

Democrats just like there're extremist

Republicans but I I don't I believe the

majority of people are or uh you know

voters are are terrible people I think

80% of our country is is is you know

relatively the same wavelength I think

80% of us can sit down for a beer and go

hey let's talk stocks let's you know

talk business whatever right I don't

care if you're a Democrat or Republican

so but I do find that when you spend

time Twitter uh you you do generally get

like you are incentivized basically to

engage with content that uh removes a

lot of context longer threads longer

context longer form video does not do

well the average view duration of a meet

Kevin video on YouTube for example is

like 9 to 10 minutes the average view

duration of a me Kevin video on Twitter

is like 30 seconds uh and that's like

scrolling mentality it's very much like

Tik Tok right it's it's you're scrolling

you watch for a little get aead line

keep going so I think sort of a warning

to people would be there there is a real

aspect to Twitter brain and I'm not

saying that's necessarily bad I like

like you get some good quick news from

Twitter you get some good quick

perspective but there's definitely a

balancing aspect that's required but

anyway mainstream media is going after

musk for basically uh his his

thermonuclear lawsuit against Media

Matters we covered this in detail

already the Media Matters lawsuit we

went through the actual lawsuit by Elon

and X against Media Matters uh it's

worth noting that the lawsuit they filed

basically agrees that what Media Matters

said was true which is really bad

because the only way you can win a

defamation case is if you prove that

what the other person said was false

Elon and X alleged that well they

presented manipulated data okay well

that just dropped the odd substantially

of success but there were a lot of

attorneys who replied to my analysis and

they're like Kevin isn't it a little

ironic that Mr free speech is getting

upset about somebody pointing out hey

you know when we scrolled for 15 hours

straight or whatever we ended up finding

a Hitler post next to an Apple ad is

that not a form of silencing that form

of free speech which then is similar to

the belief that if Twitter if Elon is

just reacting to uh you know individuals

who promote uh sort of red pilling so to

speak and then Elon blocks people who

have a contrarian point point of view

then does that narrow elon's worldview

that's a risk right and so I'm not

saying that I think Elon is

narrow-minded I'm saying

institutions have to defend investing in

Elon to other people and if institutions

think he's becoming narrow-minded or

only looking at one side or having

Twitter brain then that is a near-term

short-term downside Catalyst of the

stock I don't think it matters at all in

the long term you know the article goes

on to talk about this sort of like red

pill and what I think was interesting is

this line here these interactions boost

elon's standing with the far right or

just the right in general and this was

interesting and create incentives for

those accounts to try to get his

attention that I thought was really

interesting is this idea that oh Elon

replied now you're incentivized to do

more things that Elon might like which

kind of gets you down potentially One

Direction but anyway look in the short

term those those are legitimate bad

Catalyst in the long term is my

long-term thesis really affected by any

of this no not at all I haven't sold a

single Tesla share uh in 2023 uh we have

increased our allocation to Tesla we

went uh from about 10% cash in the

summer which I wish was 100% cash but

then again hindsight is 2020 uh and we

allocated that 10% cash uh to uh pricing

power style stocks uh I uh still hold

Tesla as a number one position

personally an interactively managed ETF

big fan I think longterm all of the

short-term mindedness of Institutions

will end up burning them but in the

short term the shorts could be right

with Q4 like Q4 is going to be tough so

there is there are definitely some real

headwinds I think what we need for not

having a disaster of a January Q4

earnings call which will probably be

like what January 19th or 20th or

whatever we really need rates to fall

going into January and then Elon being

like yo Q4 was hard but that was the

bottom that's probably what you're going

to need so yeah definitely shortterm

paining ahead but I think a year from

now we could be in a substantially

better place substantially better kind

of like you know a year ago what

November 22nd year I wonder what our

one-ear return is on Tesla right now 37%

interesting the stock was $169 a year

ago uh and of course it fell to $109 I

do think there's still a little bit of

that short short terness uh to to worry

about those so if you're shortterm heads

up now another thing that's very

interesting is there's been a lot of

talk about

Toyotas uh you know solid state battery

and I thought this was so interesting

this was a uh a piece published who

published this the drive published this

look at this snapshot right here Toyota

previously promised to launch its first

solid state battery in the mid

2020s and now has a timeline for

manufacturing two pilot or two companies

will begin pilot production in 2027 and

they'll produce seven several hundred

tons of the new electrolyte needed and

they expect to enter mass production in

2030 to be able to supply over

10,000 vehicles and they suspect that

these batteries will be used in some

kind of super high performance EV car

not like Toyota Corollas so in other

words this whole solid state battery

push is probably just Toyota

clickbait uh very interesting but we

already believe that and uh again long

run believer in Tesla shortterm though

we do have some headwinds uh it might

end up being a buy the dip opportunity I

don't know that today is that buy the

dip opportunity you know I think uh you

know you drop to like I don't I don't

see us going back to 101 but you know

you go to like a 175 on bad q1 earnings

probably buy the that might end up being

the the local bottom uh but there are

plenty of reasons as especially the the

recent discounting and that jam one

catalyst is big for short-term

bearishness anyway thanks for watching

we'll see you the next one bye do not

advertise these things that you told us

here I feel like nobody else knows about

this we'll we'll try a little

advertising and see how it goes

congratulations man you have done so

much people love you people look up to

you Kevin PA there financial analyst and

YouTuber meet Kevin always great to get

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