The Great Tesla Debate: Bryn Talkington vs. Steve Weiss

Tesla shares down more than 35% year to date, and the company now set to report earnings next week. Analysts divided on where the stock’s heading from here, and so is the investment committee. It turns out Brynn Long. Why short Brynn make a case. Why should we still believe in this stock story? Well, the stock right now doesn’t look good, so let’s just separate the two the stock from the company. Make no mistake, the chart looks terrible. Don’t forget that in January of 2023, I bought it around 1:20. This stock got to I think 100 bucks during the early part of one day of trading and that’s what the earnings estimates of $5 for full year 23. So we’re not even going to sniff that this year. So this stock could go lower. Let me make that clear. It looks broken right now. While I would not disc, what I wouldn’t discount is Elon if I think he’s one of the most, you know, prolific innovators and engineers of our time with SpaceX. Literally I think NASA would be defunded with what he’s done with energy storage Navs and then at Neural Link. And so I do think though though he is going to have right now between this earnings report which will be bad and the shareholder package, I think it’s very murky right now because make no mistake, part of this valuation is based on sentiment and also valuations, margins and earnings expanding. So I see absolutely why Steve is short. I don’t think he’s going to be short long term. I think it’s probably a trade, but I think longer time we will get some clarity and this will be over the next few months a potentially good opportunity to add or buy to the position. My question for Brynn, and you know I’m not trying to be difficult with this, is that as a fiduciary of her investor’s capital, how could she invest in a company where there is no governance? There is no independent voice on the board where they’ve gone out and made an acquisition like Solar City, right, To stop it from failing because it was his brother’s company and because the federal government told SpaceX you’ve got to stop buying Solar City bonds with the money we’re giving you for R&D. Where he’s tried to buy, you know, used Tesla for the to buy material for his house, the windows where he wants a $55 billion pay pay package. And where we saw Jack Dorsey with two companies, we’ve got Elon Musk with multiple companies that all require his time. Plus there’s the allegations and we saw it on Joe Rogan’s, you know, broadcast of drug use. So how’s a fiduciary, own this company with anti shareholder governance repeatedly time after time after time. Isn’t it worth just passing on this and going to something you don’t have to explain owning? Yeah, well I own this personally. First of all this is the personal position. So I think you know we love to own broad based ETFs, the majority of our client base. So this is not a fiduciary decision, this is my decision. And so I think that you know what you’re pointing out. I mean these things, you know, I think you just don’t like Elon. And so I think that if you separate yourself and say look at this company, well, I think that’s true. The truth, right. I’m not showing sentiments. I’m everything I said is a fact, brain. It’s AI know. But why? Why do you, why does like he’s a grown man and he, I don’t know, the Joe Rogan thing is just like strange. And that was years ago. So I think that if you just look at the company, if you look at the company and when you still look at the two companies where the best engineers want to work is our SpaceX and Tesla, because this is not an Elon show as well, although it feels that way. He has to be able to retain top talent. And I think as it relates to Tesla specifically being pragmatic about the company, as I said, the chart looks terrible and they are in a very murky situation right now because it feels like are you going to be a car company? That’s balancing higher revenues, higher earnings and margins and then also innovating at the same time with full self driving more energy and Robot Taxi or are you going to do a full pivot to Robot Taxi. I think if they come out and do that, that’s a revaluation of the name on the downside because that is probably 5 to 10 years out. So and by the way by the way wise, sorry Brent, you know if if you know if this is principally a a governance related story that’s one aspect of it sounds like it’s a sounds like it’s a major one. However you could right even put that aside the fundamentals deteriorating we’ve we’ve hit limit in terms of the EV adoption. They’ve got the oldest EV line up in the industry globally. They’ve got 20% of revenues coming from China. We’ve seen what China has done, OK. We’ve seen Apple move their supply chain to India and they’ve got better relationships and longer standing relationships with the Chinese government. We’ve seen China China is supporting their domestic producers that by the way make newer more richer in terms of the accessories in terms of of you know basically even the even you know the the the range so of their cars than Tesla number that’s number two. Number three. Number three we’ve seen Elon just tweet out Oh no more prices we’re raising prices he lied they’re cutting prices we would say big robo taxi announcement we’ve got we secured funding for the take private. The guy is a pathological liar to keep his stock price up so forget about that. The fundamentals material you’ve got, you’ve got lots full of EVs that are selling at major discounts from the major auto players that couldn’t sell them. So the fundamentals are horrendous. So, so I think that with in China, no, no, no, let’s go. Let me one more thing. It’s like one more one more like buzz, buzz line. It’s like once again, you just don’t like Elon by the way and so, so it’s like when you look a genius, when I’ve said that repeat list, when when you when you look at the EV market, they’re actually continue to be with BOID, the top selling brand in China. And so while we look at America, which is about 9% of the EV space, China, which Tesla was this single, it’s like the only manufacturing company that it was able to build in China autonomously without having influence from the China Chinese government. He has a very strong relationship. I believe they’re about to announce they’re going to be building their next Gigafactory in India, a huge untapped market. And so I think that when you look at this company in the US, if this was AUSEV story, I would not own this name. I don’t think Americans want to drive EVs and I think Americans don’t want to drive EVs as they’re only in China. It’s a very different story. Work this in and you can say what you want, then we’re going to be done. Adam Jonas today, Morgan Stanley. Why do we remain overweight? Tesla shares and look, he’s been, you know, skeptical along the way about, you know, the the repeated price cuts and all the other stuff. We believe Tesla has significant attributes to be valued as an AI beneficiary. But the company must first see stabilization in the negative earnings revisions within the auto business, right? He’s not saying they have been, but Brean’s entirely wrong about their ability to retain talent. If you take a look at Tesla and you take a look at we just had two critical people leave Tesla this week. Their turnover in their executive ranks and their engineering ranks is legendary, is unprecedented. So I don’t know where she gets that from. But look at the facts. And I know it’s maybe because I just don’t like Elon that all these people are leaving, but I really had nothing to do with it. No, I I totally, yeah. I mean, once again, he’s definitely a so you feel the stock is up 750% over the last five years. Exactly. And I haven’t been short over five years. I’m short now because it’s all coming home to roost. I understand. But there are periods of time over the last five years where notable people have been short and it hasn’t mattered because their shorts have been proven to have not worked well again. I haven’t been short, number one. Number two, I understand. How many other EV manufacturers have we had over the last 10 years? Brynn. What? I don’t even know what that means. How many price cuts have we had with Tesla models over the last? I mean, Steve, like, how many wisdom is chasing you if you would just stop? OK, Like, seriously, Like, what the hell is she saying? I don’t even get it, Steve. We’re going to take a break. We’re going to take a break. Just admit you’re wrong and the stock is going lower and I’ll buy more. Lower. That’s what she should be saying. Facts are facts. There’s no fact that the stock is doing anything. With everything I said about the governance, about the price cuts, about his tweets that have all been wrong, about the competitive landscape, about the appetite for EVs, those are all facts, Brynn. We’ll see. Yeah, we will.