The Only Direction Tesla Investors Can Look Is Forward

In this segment from the Motley Fool Money podcast, host Chris Hill and senior Motley Fool analysts Jason Moser, Matt Argersinger, and Ron Gross talk Tesla (TSLA -1.06%), which delivered some painful numbers last week. But as Foolish investors have often seen, the guidance ahead often outweighs the quarter that's in the books, and what CEO Elon Musk had to say about where his company is headed was all optimistic. Wall Street bought in.

The Fools consider the electric-car innovator's situation, and offer up a thought about a couple of less obvious threats to its success and share price.

A full transcript follows the video.

This video was recorded on Aug. 3, 2018.

Chris Hill: Shares of Tesla up more than 15% this week despite a second quarter report that featured Tesla's worst loss ever. Ron, they lost more than $700 million, but the confidence that profits are just around the corner really seems to be there.

Ron Gross: I guess so. Investors were focused on, they hit the 5,000-sedan goal, they say they're going to be able to up it to their 6,000-sedan goal. They said they would not need to raise more cash, which I think was a big deal. Investors calmed down after he said that. He said they would be profitable in the second half of 2018. Get this -- Musk expects Tesla will record a profit in all subsequent quarters. Now, who wouldn't want to be a shareholder of that?

Hill: Didn't we have that recently for, what was it, American Airlines' CEO coming out and saying, "We're going to be profitable from now until the end of time?"

Matt Argersinger: "We will never lose money ever again," was roughly the quote.

Gross: He's obviously full of bluster and makes big promises. Interestingly, the Street also reacted to the fact that he apologized this call for being rather rude to analysts on the last call. I'm a forgiving guy, that's fine. It's kind of weird that he had to apologize because he can't hold his tongue. I'm not a big fan. I think he's too much of a salesman for my taste. I actually finally bit the bullet, pulled the plug and asked for my $1,000 deposit back. I decided not to pursue a purchase of the Model 3. I just got fatigued by the whole thing.

Hill: Real quick, how long were you waiting? From the time that you put down $1,000 to the time that you said, "I'd like my money back." How long?

Gross: It was in the second half of 2017 that I asked, so it hasn't been a full year yet, but it's probably coming up on it.

Argersinger: I think Tesla is a paradox. In a way, short sellers are pounding this stock. Of course, they got obliterated this past week. That tends to happen to companies like this. But, actually, if I'm a Tesla short seller, I'm rooting for this company to be successful, start generating a profit. Something you said, Chris -- when they start generating consistent profits, maybe it'll be valued just like all the other automakers, and it wouldn't get this crazy valuation that it gets in the market!

Gross: You're going to get tweets that say it's not a car company, it can't be valued as a car company.

Argersinger: I get it!

Jason Moser: A bit of an unrelated note here, but sort of related -- I was reading recently where Jeff Bezos is pumping a lot of money and resources into Blue Origin, his space company. Now, after reading that book, The Space Barons, which talks a lot about Bezos and Musk and their race to space, I really do believe that SpaceX is Musk's true love. If he needs to start devoting more time and/ or resources to SpaceX, I just can't help but feel like Tesla is set up to suffer from his absence if there's any kind of a prolonged absence. SpaceX is his baby, his passion. Tesla, maybe not so much.