Tesla Stock Disaster, Bankruptcy, Margins, Musk Lawsuit, Carvana, Lucid, & Rivian,

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

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below expires and that will be the best

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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