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Liberal Rejoicing and Elon's True Crisis

Written by Alex Koyfman
Posted May 19, 2022

Dear Reader,

Last week, the Webb Telescope revealed an early but already history-making image of a black hole located in the hub of our home galaxy, the Milky Way.

With a mass of 4 million suns, Sagittarius A* would fit inside the orbit of mercury if placed at the center of our solar system, and is, astonishingly, not even close to the size of most massive objects in the known universe.

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A black hole 55 million light years away, in the Messier 87 galaxy, located in 2019, contains as much matter as 6.5 billion suns, making it one of the massive objects ever observed in the known universe.

And yet this too pales in comparison to the hyper-massive collection of particles known as liberal schadenfreude over the collapse of Tesla (NASDAQ: TSLA) stock in the weeks following Elon Musk's announced intention to single-handedly acquire the Twitter social media platform (NYSE: TWTR).

With the integrity of the platform's 330 million users now in question, Musk is now hesitating as sounds of joy echo across the twitterverse.


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The losses feeding this woke Democrat delight are indeed profound, as Musk's 175 million-share stake in Tesla crumbled right along with the company's once 13-figure valuation...


From a high of $1,145 on April 4 all the way down to below $750 in yesterday's trading, a 35% drop — meaning $425 billion or so shed from Tesla's market capitalization.

That's roughly $72 billion in personal wealth lost for the Tesla CEO since making this tweet:

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The link between those four words and the collapse that followed will likely be etched in history.

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In 1932, the numbers behind this chart would have represented a loss of half the U.S. GDP.

As is often the case, however, the left's ecstatic tirade missed the bigger picture.

Share Price Isn't Everything

Though Tesla has lost out hard in share value over the last several weeks, ostensibly a combination a market forces and Musk's selling to finance the $44 billion Twitter purchase, business at the company has literally never been better.

Last month, Tesla reported $18.7 billion in earnings, beating expectations by nearly $1 billion, with actual earnings per share at $3.22 versus the expected $2.26.

Granted, Musk's stance on freedom of speech — or freedom of hate speech, as it's being branded by the left — won't actually make its market impact known until at least the end of the next quarter, but my guess is that when push comes to shove, most of the Democrats who can actually afford Teslas (as distinguished from those who can afford only to scream about it online) won't want to give up the image, the performance, and the oh-so-not-risky styling of the iconic American EV brand.

As of 2022, the world's king of EV-makers is the most popular luxury carmaker in the U.S., with 352,471 units sold in the previous year. For perspective, BMW came in second with 336,644.

A vast majority of those cars were sold in wealthy, Democrat-predominant urban and suburban areas, with 27% of all U.S. sales going to just two of the top Tesla-buying ZIP codes in Northern California, Atherton and Los Altos.

If a year from now those numbers have changed in any significant way, I will be shocked.

That said, the company does have problems... major problems that the press has been ignoring to focus on distractions like the Twitter buyout.

And these problems aren't a matter of public relations, or branding, or a few well-aimed tweets.

They're a matter of engineering, and they affect every last unit of every model in the lineup, as well as every new Tesla to come off the assembly line for the foreseeable future.

200 Without Evolution?

The electric motor Tesla uses, part number 1037000-20-A, suffers from a major design flaw... a flaw that dates back almost 200 years to the very first electric motor prototypes designed by British engineer Michael Faraday.

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This flaw isn't so much a flaw as it is a failure to evolve, and it lies at the heart of the motor itself, the spool of copper wire that creates spin when electrified inside of a magnetic field.

These copper spools are still designed and manufactured much as they were in the early 19th century. Though bigger and wound with greater speed and precision, the distribution of charge still remains unregulated within the entire copper mass. As primitive as a telegraph, whose roots date back to the same time.

The result of this uncontrolled, unregulated current flow is a loss of efficiency, an increase in electrical resistance and heat, and a resulting decreased service life.

Faraday's basic design never changed, and today the world is running on billions of electric motors, ranging in size from millimeters across to the proportions of a single-family home, that all inherited this shortcoming.

After Two Centuries, the Status Quo Ends

But the entire industry is about to get yanked into the 21st century whether it wants to or not.

And it's all because of the innovations of a single company that's finally been able to apply advanced AI technology to the distribution of current within an electric motor core.

It is literally the first true evolution of a 200-year-old technology... and it's already starting to find its way into commercial products.

The result of using these dynamically managed electric motors is an increase in efficiency of up to 10% — an instant game-changer, particularly in the heavier categories such as automotive motors.

So yes, this is a major problem for Tesla, because despite liberal trolling, Tesla will be the likely king of the hill for at least the rest of this decade, and to stay ahead, an innovation as impactful as this simply cannot be ignored.

If Tesla does ignore it, it doesn't take a logic leap to assume that the likes of BMW, Ford, Toyota, Porsche, and pure EV-makers Lucid and Rivian won't.

A Real Buyout Target

Right now, the company behind this disruptive innovation trades at a market capitalization of under $150 million. By contrast, the market its intellectual property could capsize in just a matter of a couple years is valued in the range of $2 trillion–$3 trillion.

The mainstream market does not realize this yet, but now you do, which means that the guys in the position to make buyouts or controlling-share-magnitude stock purchases already do too.

I wouldn't be shocked if this turns out to be one of this decade's biggest stories in tech, and with the entire sector well into correction territory at the moment, current market prices could make this the best entry point the stock will ever see again.

Which means that the last, biggest gains are being cemented in place right now, as you read this.

Don't wait until you see this story in The Wall Street Journal. It will be history by then.

To help you learn everything you need to know about this company right now, I've put together a quick video presentation.

No need to register. Access is instant.

You'll get the story, the science, and the market analysis, and then you'll understand the size of this opportunity.

Don't wait a day on this. Access the video right here, right now.

Fortune favors the bold,

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Alex Koyfman

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His flagship service, Microcap Insider, provides market-beating insights into some of the fastest moving, highest profit-potential companies available for public trading on the U.S. and Canadian exchanges. With more than 5 years of track record to back it up, Microcap Insider is the choice for the growth-minded investor. Alex contributes his thoughts and insights regularly to Wealth Daily. To learn more about Alex, click here.

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