In 2006, I recommended buying shares of a new company called First Solar (NASDAQ: FSLR).
Following that recommendation, I got an email from an analyst who told me that not only was solar a loser’s bet, but First Solar was never going to do anything but bankrupt itself.
From November, 2006 to May, 2008, First Solar soared, eventually topping out at more than $311 a share.
That means that folks who got in on day one had the opportunity to land a gain of 1,144%. Check it out …
Now during that year and a half, I got about a dozen or so emails from this analyst. Mostly when the stock temporarily showed some weakness.
“I’m telling you, this thing is going to leave you penniless!”
“The chickens are coming home to roost. You were warned.”
“It’s the most overvalued stock on the planet. What a scam!”
Then it happened.
About 18 months after First Solar went public, it fell off the cliff. In fact, the entire market imploded and took everything with it. And I got this email …
“I told you! Sucker!”
Nevermind the fact that we unloaded that stock at around $225.
In any event, the problem with these folks is while they’re always warning everyone of Armageddon, they’re not making any money.
The Curious Case of the Tesla Bear
When Tesla Motors (NASDAQ: TSLA) first went public, it was the target of every naysayer and electric car hater out there. How Elon Musk was able to deal with all that negativity in a calm manner always amazes me.
From June, 2010 to September, 2014, the stock was on a tear, climbing from a debut price of $19 to a high of more than $285. While the bears kept trying to convince us that Tesla was a dud, it delivered gains in excess of 1,400% for investors.
And of course, after it started to deflate, all we kept hearing about was how Tesla was a dog and how it was way overvalued. And in all fairness, at those high valuations, I too saw it as overvalued. But I was never a dick about it.
I never spent my days writing bash pieces about the company or finding any minor flaw as an excuse to attack the company, the car, the technology, or management. Quite frankly, I just find that to be in poor taste.
So needless to say, for the past few weeks, I’ve been biting my lip while being bombarded by the Tesla haters. And while their numbers are few, they are very loud.
On Wednesday, Tesla will announce earnings. And the truth is, if it doesn’t look good, the stock is going to get crushed. Not just because of an earnings disappointment, but because the weight of any bad news will be amplified by a very shaky broader market and an army of Tesla bears that are going to waste no time in attacking one of the few companies in the world that’s actually doing something worthwhile.
But hey, it is what it is. This is just part of the deal with any company providing disruptive technology in the face of mediocrity and defeatism. Hell, the same thing happened with Ford back when that company was raising capital to launch the Model T.
You know, back in 1903, the president of the Michigan Savings Bank told Henry Ford’s lawyer, Horace Rackham, “The horse is here to stay, but the automobile is only a novelty – a fad.”
Fortunately, Rackham didn’t listen, and invested $5,000 in Ford stock. He later sold it for $12.5 million.
Now I’m not saying Tesla will turn into the powerhouse that Ford once was. Or maybe it will. Who knows. But what I am saying is that companies like Tesla, and people like Elon Musk are striving to do something important. They’re standing up to the bullies of complacency and saying, “No, you’re wrong. We can do better, and we will.”
Regardless of what happens to Tesla’s stock on Wednesday, nothing can change the fact that Tesla was (and still is) the biggest catalyst for electric vehicle acceptance.
While the major automakers kept telling us how it couldn’t be done, some smart-assed South African engineer threw up his proverbial middle finger and did it. It’s such a fantastic punk rock moment in that the status quo found itself not only insulted, but embarrassed. As it should’ve been.
But here’s the big question …
If Tesla’s stock takes a big hit this year, what happens next?
Does that mean it’s the end for Tesla?
Not a chance.
Tesla has built an empire that’s worth billions. Even at lower valuations, the smart money still wants a piece of it. The same folks that ponied up for Apple, Google, and Facebook in the early days know that Tesla is a sleeping giant. And if that stock takes a hit on Wednesday, there will be plenty of willing buyers for those cheap shares.
Oh, and while most of the major automakers have been trying to catch up with Tesla on the electric vehicle front, here’s what the folks over at Tesla have been doing …