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Tesla's annual shareholder meeting is over, and the biggest surprise wasn't about exciting innovations; the surprise was advertising.
In response to a question from the shareholders, Tesla CEO Elon Musk said that his company will also try to advertise itself. The audience in response at the shareholders' meeting in Austin, Texas, went out of their way, and Musk said he was surprised by this, and the electric vehicle manufacturer's stock is rising in early trading on Wall Street.
In addition, it seems that investors have begun to think Investors may love the news, but Tesla's foray into advertising proves once again that as Tesla grows, it begins to behave like a traditional automaker. The first example of this was the profit margin in the first quarter. Tesla's decision last year to stimulate sales by lowering prices resulted in profitability. The operating profit margin in the first quarter reached about 11%, down from 19% a year ago. For comparison, Toyota's operating profit margin in the fourth quarter reached almost 10%.
Smaller automakers like Ferrari don't need to advertise and have no problem selling. But Ferrari's sales are in the tens of thousands, while Tesla's are now in the millions and growing. In the past, Musk has said Tesla didn't need to advertise itself because demand has always outstripped supply.
Musk said in response to a question about pricing that Tesla adjusts the price based on real-time information on order rates. The EV manufacturer delivered a record number of cars in the first quarter, with no less than 423 thousand vehicles. Musk believes the Tesla Model Y will be the world's best-selling car in 2023, but the price has to come down for that to happen. Ford and General Motors will spend $2.2 billion and $4 billion on advertising, respectively, in 2022. The $6-plus billion figure represents roughly 2% of total 2022 sales. It's a waste, but GM and Ford believe it's coming back. Down the road, investors will have the opportunity to assess how effective an ad is.
Arriving at the shareholder meeting, investors were more interested in hearing how Musk plans to spend his time, especially after recently appointing a new Twitter CEO to replace him. He said Twitter is a short-term distraction and that he himself is in a stable place, adding that he doesn't need to spend a lot of "time cumulative" on his social media platform. He also added that he plans to stay on as Tesla's CEO.
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Please note that the article should not be considered as investment advice or marketing, and it does not take into account the personal data and requirements of any individual. It is not a substitute for the reader's own judgment, and it should not be considered as advice or recommendation for buying or selling any securities or financial products.
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Disclaimer:
The Score performance whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained.
The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained. The Readiness Indicators, Sentiment Indicators and total score are calculated by the retroactive application of a model constructed on the basis of historical data and based on assumptions integral to the model which may or may not be testable and are subject to losses. Active trading is generally not appropriate for someone of limited resources, limited invesment or trading experience, or low-risk tolerance. Your capital may be at risk.
Please note that no offer or solicitation to buy or sell securities, securities derivatives of future products of any kind, or any type of trading or invesment advise, recommendation or strategy, is made, given or endorsed by StocksRunner including any of their affiliates ("TS").
This information is provided for illustrative purposes only. You should not rely on any advice and/or information contained in this website and before making any investment decision. we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.
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