A month ago, on April 4th, I wrote: "Tuesday Turmoil – Tesla Valuation Reaches Peak Insanity" in which I noted how ridiculous it was to value Tesla (TSLA), who struggle to make and sell 25,000 cars in a quarter, at the same price as GM (GM) or Ford (F), who each make 25,000 cars PER DAY, (that's 90 times more). The companies are not even playing in the same ballpark (though they are playing the same game, so investors get confused) – it's like betting your son's undefeated little league team can take on the Yankees – there are other factors involved than just their record against other children.
Still the masters of spin, Tesla's shareholder letter, which looks more like an advertisement for their cars, touts "Record vehicle production" and rightly assumes that the average TSLA investor can't do math (or they would not be TSLA investors) and that 25,051 is only 169 cars more than last quarter's 24,882 and it's getting really, REALLY hard to see a path that gets them to 200,000 cars by the end of this year. Also, as I noted to our Members in our Live Chat Room this morning:
Last Q they said they had "short-term production challenges starting at the end of October and lasting through early December from the transition to new Autopilot hardware" as an excuse for their lack of significant growth from Q3 but now, 169 more cars is a proud record, which is really interesting since last Q they claimed that 6,450 cars from Q4 were "in transit" and would be counted as deliveries in Q117. If that's true, then did Q1 orders drop by 6,300 cars? Will we ever know the truth with this company?
Not only are sales a major disappointment but the purchase of Solar City from Elon's cousin is causing more expenses and more losses and also something no one is discussing but should be – dilution! That's right, last year, TSLA only had 132,676,000 shares outstanding and now they have 162,129,000 shares outstanding, that's 23% more shares than last year – not to mention all the warrants attached to their debt offerings. That's the…