Economy Gene Munster defends Tesla Bulls, Irwin makes Roth Case...

Gene Munster defends Tesla Bulls, Irwin makes Roth Case from Roth Capital

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<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "electric car manufacturer Tesla Inc (NASDAQ: TSLA) is one of the most competitive stocks, and the debate has probably picked up pace after the company announced a $ 2.65 million stock offer at $ 767 a week this week. “data-reactid =” 18 “> electric car manufacturer Tesla Inc (NASDAQ: TSLA) is one of the most competitive stocks, and the debate is likely to pick up steam after the company announced a $ 2.65 million stock offer at $ 767 this week.

The bear argument: why does Tesla need the money?

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Tesla has $ 6.7 billion in its latest earnings report Dollar reported In terms of cash and cash equivalents, the question is why the company needs another $ 2.23 billion, said Craig Irwin, an analyst at Roth Capital CNBC’s “Squawk Box”.“data-reactid =” 20 “> Tesla reported $ 6.7 billion in cash and cash equivalents in its recent earnings report, which raises the question of why the company needs an additional $ 2.23 billion, Craig said Irwin, an analyst at Roth Capital, told CNBC. ” Squawk box. “

There is only one reason why the company would need this additional $ 2.23 billion, he said: Previous financial benefits will not reappear as SG&A costs will increase.

On the other hand, Tesla deserves credit for taking the right step in raising money, as it was done from a position of strength rather than necessity, the analyst said.

The Tesla Bull argument: focus on the future

Gene Munster, managing partner of Loup Ventures, said Tesla is focusing on two trends that will dominate the future of the automobile: electrification and autonomy.

The bears may lack the “undeniable truths” that Tesla is addressing in a large market where Americans drive more than 2.5 trillion miles a year on highways, he said.

It would be wrong for investors to negatively evaluate these “issues” and Tesla is a leader in the region, Münster said.

Irwin replied that he saw the future of the auto industry as positive.

At the same time, one can look beyond Tesla’s role and evaluate his finances, said the analyst.

Without Tesla’s consumer finance unit, shares trade three times the valuation of Daimler and five times the valuation of BMW, he said.

These automakers and others are likely to overtake Tesla’s lead, and the stock’s valuation could mean it has a lead, if not longer, of 10 years, Irwin said. A two-year advantage is a “fairly fair schedule” since Tesla has no “strategic structural strategic long-term advantage,” he said.

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Münster: “dire situation” for car companies

Münster remembered a meeting with a nameless “Top 10 automaker” that has been around for more than eight decades.

The auto managers expressed the view that just because they have been around for almost a century does not mean that their company has a future, he said.

Munster said that within a decade, one of the automakers, now one of the top 10 world leaders, will be “on the way out of business”.

Tesla shares fell 0.26% to $ 801.93 at Friday’s release.

<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = "Related links:“data-reactid =” 36 “>Related links:

<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = "“Dean of Valuation” says Tesla still has a long way to go to justify the stock price“data-reactid =” 37 “>“Dean of Valuation” says Tesla still has a long way to go to justify the stock price

<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = "Tesla says the Chinese public health epidemic is a risk factor for its business“data-reactid =” 38 “>Tesla says the Chinese public health epidemic is a risk factor for its business

<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = "Photo courtesy of Tesla.“data-reactid =” 39 “>Photo courtesy of Tesla.

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<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = "© 2020 Benzinga.com. Benzinga does not offer investment advice. All rights reserved.“data-reactid =” 45 “>© 2020 Benzinga.com. Benzinga does not offer investment advice. All rights reserved.

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