A week ago, I said Elon Musk would “figure it out.”

“It” was Tesla, and specifically Tesla’s stock, which headed into Q1 earnings down more than 40% in 2024.

The issues are myriad, but the fundamental problem’s straightforward: Tesla’s a growth stock with no growth.

When the company reported on April 23, Tesla said revenue fell YoY last quarter, as tends to happen when you’re selling less of your products at lower prices.

Who wants to pay an absurd multiple for negative growth? Isn’t that the definition of a poor investment decision, particularly at a time when an onerous rates backdrop points to multiple compression?

If those are the questions, the answers are, “nobody” and “yes.” You don’t pay 50x for negative growth and high rates are kryptonite to long-duration equities.

But as I tried (without a lot of success) to convey to readers a week ago, you’re not buying deliveries or sales or growth when you buy Tesla. You get that stuff as a bonus. A share of Tesla is a stake in Musk, and while I don’t care much for Elon, I’m a buyer of his eccentricity at the right price.

My rule of thumb (not investment advice) is simple: If a blue chip’s down anywhere between 50% and 75%, I’m asking why, and if there’s not a damn good reason, I’m usually buying. Anything beyond 75% probably means going concern concerns (if you will), and I don’t want any part of that. But when you see something like, for example, Meta down three-quarters in October of 2022, the only thing that matters is that it ain’t going out of business. The risk-reward for buying a blue chip down 75% when it ain’t going out of business is skewed to the upside. And asymmetrically so.

Tesla down 65% from its “everything bubble” (i.e., November 2021) highs was an example of that setup, but it was also a chance to buy a bear market in the Musk mythos. Musk mythos bear markets tend to be dip-buying opportunities for two reasons:

1. Musk’s a singular individual. His delusions of grandeur aren’t entirely delusory. His puerile antics are, in part, a function of the same genius that made him history’s richest person. You don’t have to like him to concede that the odds of one or more of his companies changing the face of human history are high. He has a lot of proverbial irons in the fire. Tesla’s the only one of those irons that has intraday liquidity.
2. Musk’s impulsive, he’s self-conscious and he has the world at his fingertips. He can get anyone on Earth on the phone any time he wants. When the real-time, public measure of his success (i.e., Tesla’s stock price) is down enough to be headline news, he’ll try to remedy the situation to the extent he can, and as we’ve all seen, he’s willing to go to extraordinary lengths in that regard up to and including remarks and behavior that some critics insist constitutes securities fraud.

Those two considerations are enough to make Tesla worth a look when it’s on sale, but even if they weren’t, you get two kickers. One is Tesla’s actual revenue. Rising or falling, there’s still a lot of it. The other is the Musk-as-messiah fan club, members of which will buy anything he’s selling, whether it’s a product, a service, an idea, a vision from a mushroom trip, a peyote hallucination or a political narrative.

Just hours after I suggested Musk would engineer a rally in the stock, Tesla said in its earnings deck that the company intended to accelerate the production of new models. The release was laughably (and predictably) short on specifics, but that didn’t matter. What mattered was that the sure-fire way to give the shares a bump amid concerns that Musk’s robotaxi dream might slow down the introduction of a lower-priced, mass-market vehicle was to simply suggest that in fact, that vehicle’s launching sooner than previously expected. Who cares if it’s true? Who cares if there’s even a blueprint for that vehicle?

That was the easy part for Musk. Tesla rose sharply last week, and all he had to do was allude, vaguely, to an accelerated timetable for a new model. But this is Musk we’re talking about, so you knew something flashier was coming.

Sure enough, he showed up in China over the weekend, when he met with Premier Li Qiang in Beijing. Pause for a moment to consider: It’s not easy to schedule an impromptu meeting with a No. 2 government official if you aren’t also a high-ranking government official. If the government in question is China’s, it’s basically impossible.

But this is no ordinary person asking. This is Musk, and this is also Li who, you’ll recall, was the Party boss in Shanghai before he ascended to the Standing Committee where he replaced the late Li Keqiang. Tesla’s top international production facility is located in Shanghai. Li helped set it up with all sorts of sweeteners and incentives.

Remarkably, Musk was able to convince the Chinese government to grant him what sounds like provisional approval for the introduction of Tesla’s Full Self-Driving system in China, a quest which necessarily included discussions with the Party about data security.

Suffice to say Xi’s not enamored with the idea of anyone but him collecting data on China’s citizens. The idea of a foreign company securing approval to monitor Chinese drivers and collect real-time data from their cars is unthinkable — until you consider who’s asking. Musk also reached a mapping and navigation agreement for Tesla with Baidu over the weekend.

Bloomberg, in a rare example of editorial restraint, said “Musk’s quick visit to China paid immediate dividends.” It was an understatement. Dan Ives called the trip a “watershed moment” for Tesla. The stock rose double-digits on top of last week’s gain.

Coming full circle, six days ago I said Musk would figure it out. Since then, Tesla’s added ~$150 billion in market cap. You’re welcome.