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Chamath Palihapitiya, a Facebook millionaire turned venture capitalist and long-time investor in Tesla, put an end to the Bull TSLA case on CNBC as the stock took a hit after a difficult quarter.
We previously told Palihapitiya that it had invested in Tesla's shares and bonds in 2017 and had predicted that Tesla Model 3 would erase sales of the BMW 3 Series.
Tesla's stock has not performed well and although Series 3 sales have declined in the United States, they have not been completely erased.
The TSLA stock price has fallen 16% in the last month since the company announced deliveries well below the first quarter of 2019.
But Palihapitiya remains optimistic about the title and has gone on television to dissociate his vision of TSLA as a long-term investment.
It is fair to say that much of his investment thesis rests on his trust in Elon Musk:
"If you take a step back right, if I asked you to try driving a golf ball from the jetty here in a cup of tea and make you a million attempts, I suspect that a million times that you could not do it. he. But if you then took someone else and he was able to do it nine times out of ten, you would say "wow, this person is a great golfer". The analogy I would do, is that Elon basically did this equivalent. He was able to send a rocket into space, to do all kinds of things extremely useful and extremely interesting for the world, then to go down and land on a boat in the middle of the ocean. In all honesty, the kind of technical sophistication he has in mind that he has been able to apply in all his endeavors is unparalleled. "
As for Tesla, the investor continued:
"So when we looked at Tesla, we thought we were a company whose inflection point was as close to the iPhone version. By that we mean a society that has grown up, takes risks and has finally found the mass product that would unlock a tremendous amount of adjustment. And it was model 3. And so far, I would say it is up to what he subscribed, namely market electrification, to market an incredible user experience at a reasonable price, which cannibalize its competitors. And what you see in the results, in my opinion, is a business that is now maturing under all these requirements. "
Palihapitiya has an interesting approach to investing in Tesla.
He argues that the stock is being manipulated by some investors and hedge funds, he prefers to stay away and invest in Tesla's bonds.
The investor said:
"Is the company best suited if you want to drive and observe accuracy and performance from one quarter to the next? No, but if you want to take a step back and take a three or five year vision and say where I can make my money … and especially with the converts, which is beautiful, it's that its disadvantage is protected because it's above all the equity and the other debt. And so, if you are worried about liquidity problems or if you are worried that the company will have to sell, it will be paid first. So for me it was a risk free option for the Edison of our generation. "
Regarding the behavior of Musc, Palihapitiya says not to get caught up in a few mistakes and look at the products:
"It does not change that the minute you sit in this car, your definition of what is expected is changed forever and you wonder why all the cars around you in which you come in and that you buy may not have the same car offers. So, in the end, whether you like his style or not, his substance is irrefutable. "
Here is the full interview:
Electrek's Take
I think Palihapitiya is extremely intelligent and I mostly agree with what he said. It exposes very well the case.
Although I think Tesla and Elon have made several mistakes, especially in recent months, I do not think they have a major impact on the long-term prospects of the company.
Their electric cars are already the best on the market and I think they have an excellent strategy for the next big disrupter of the automotive market: autonomy.
However, I do not agree with him regarding the volatility of the title. Although short sellers certainly play a role in volatility, I also think that Tesla has made many mistakes that have contributed significantly to the recent significant decline in value.
Full Disclosure: Seth and I have bought TSLA at the last downturn in recent months because we believe that Tesla is still an important part of the history of electrification. That's to be anti-Tesla: P. Our disclosure is available on our About page.
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