Shares of innovative and fast-growing companies have plummeted since the beginning of November.
While I don’t think you know why, the most common reasons are for investors to abandon expansion stocks in favor of cyclical ones in anticipation of fed interest rate hikes. Mix the worry of a military confrontation with Russia and you will have the obligatory situations for a panic of sale.
As one who has noticed that market situations are worsening, in particular, the dot-com crash and the monetary crisis of 2008, I think those fears are exaggerated. In fact, the shares of the corporations that have fallen are successful, fast-growing corporations that are not in imminent danger of bankruptcy.
Instead of an explanation of why to liquidate your holdings, I see the recent correction as a buying opportunity.
A typical example is Tesla, whose inventories have lost 26% of their price since early November, when CEO Elon Musk began promoting its inventories to pay taxes on Tesla’s inventory characteristics that he chose to exercise rather than let them expire in August 2022. (As CNBC reported that it sold about 10% of its Tesla inventory to pay more than $11 billion in taxes on an inventory option refund of more than $23 billion. )
With the company poised to report record profits and analysts expect a 60% shipment expansion, Tesla’s stock is expected to recoup the lost floor and move forward as Musk meets the five financial statements needed to gain even more Tesla inventory options.
(I have no monetary interest in the securities mentioned).
Tesla is expected to post record profit and make investors expect immediate volume expansion when it releases its 2021 effects after the market closes today. As reported through the Wall Street Journal, analysts surveyed through Factset expect Tesla to reveal that in 2021, the company generated about $53 billion in cash and $5300 million in net profit, up 68% and 635%, respectively, than last year.
After delivering more than 936,000 cars in 2021, analysts expect Tesla to deliver around 1. 5 million cars to consumers in 2022, up 60% and above its average annual expansion rate of 50% in deliveries in the coming years. . , according to the Journal.
Musk, who was not involved in Tesla’s third-quarter earnings call, will likely spark investor enthusiasm when he discusses the company’s product roadmap in today’s earnings call that, as the Journal noted, may include:
Musk, who receives no base salary or money bonuses from Tesla, gets inventory features if Tesla achieves express monetary goals. As CNN reported, this is due to the terms of a 2018 payment program that gives you “101 million adjusted inventories in 12 equivalent tranches. “, as the company reaches benchmarks. “
Having met the market price criteria and seven of the monetary targets, it has already gained 59 million functions from this package. Analysts expect it to get the remaining 42 million features when Tesla hits the other five remaining monetary targets this year.
Once Tesla releases its 2022 results, analysts expect it to get 4 tranches of options in 2022 and one in early 2023. Dan Ives, a generation analyst at Wedbush, estimates that the five tranches would be worth $36. 3 billion if Tesla’s stock were trading at a January price. . 24 value of $930. a share.
Expect it to start promoting Tesla’s stock to pay the tax bill in 2027, when those features are about to expire unless you renew them.
Until then, Tesla’s inventory is very likely to take advantage of upsizing distribution, with inevitable ups and downs, as long as Tesla continues to outpace those competitive expansion targets.