The Tesla Flying Roadster Launch Event & SPCX Merger Price.

Now, we're talking flying Tesla Roadster. Let's explain what the details of this are. Is there a reality that you're going to get a flying car? And what is this actually for? I've got a prediction. And I have to say, it's really weird. We set this coupon code for the courses to expire on Friday. We called it O Elon. And then today, literally on the expiration day, we get Elon talking about apparently or leaked information talking about Tesla's nearing the unveiling of a radical new flying roadster. So, the timing of it is like uncanny. It's weird, but whatever. So, what is going on here with this talk about a flying roadster? First of all, let's be really clear. To actually get a flying vehicle registered and licensed with the FAA would likely be a multi-yearlong process. We're having a very hard time getting EV talls to actually expand in popularity and to make these happen. In addition to that, for people to actually become a pilot is usually a $100,000 licensing process. Maybe you could get it done less expensively, 50k, 60k, but it's pretty expensive. And that's just for a single engine prop. You get into something that's like a rocket powered flying car. You're talking a complex uh it likely instrument requirements as well. You're probably looking at a 2 or threeyear human licensing process plus a two to threeyear actual vehicle FAA licensing process. In other words, I don't think that is actually what's happening here. And I don't think that's the intention at all. Instead, I actually think this talk about a flying car that the information is now reporting is actually a marketing pitch for how SpaceX and Tesla can ultimately combine their technologies. Look, we're literally going to put SpaceX boosters on a car to show you how we can take a car that's flipping on a ramp and then make it land on its tires. Because our rocket boosters, which we would use for satellites, so they can move or our rockets are reusable rocket delivery systems as they come land again and they adjust to get onto the sticks or onto the um uh you know landing ships out in the water. This is a showoff event. This is really what this is and it's brilliant. Now, I've got some more comments about the SpaceX Tesla merger because some people were a little confused in the comments. So, I'm going to clarify that as well in just a moment, but let's actually look at this article here. Uh, so first things first, uh, we'll just go through some of the components that I had uh, previously highlighted, which I noticed some of, uh, those highlights didn't actually make it over here, but uh, that's okay. I have them up and we'll go through by comparing. So, what I highlighted originally was right here. Tesla is planning on unveiling a new design, which would likely come as or be revealed as early as this month. Three people familiar with the matter said uh there will be an event apparently that will be an elaborate stunt that will show off the flying capabilities of the Roadster in a collaboration between Tesla and SpaceX. And it's likely to take place at SpaceX's testing center in McGregor, Texas. Notice this is marketing, folks. This is Elon marketing 101. It's, hey, look how coordinated our two companies are. Okay, here's how it's actually going to be pulled off. Apparently, this event is apparently going to involve showing the vehicle racing onto a magnetized roller coaster-like ramp. Now, when it says magnetized, I kind of think they mean induction. You know, usually when we think magnets, we think like, oh, it's going to like attach, but typically, you know, electromagnetism, induction, and magnets, they're all related, okay? It's all like the same force. Have you ever used an induction cooktop? You have to use a certain like iron pan to actually get it to work, right? It's like it has to be ferrris. It has to be magnetic. And then the induction loop can heat up your pan. It's actually how the um oh what's it called? That roller coaster in Islands of Advan Islands of Adventure Florida works. Uh the big one over there. Not the Incredible Hulk, but it's the new Islands of It's a great roller coaster, but they work on an induction loop uh ride roller coaster. I got to know what it's called. It's not the Incred Coaster. That's Disneyland. I always think of that one. If I quickly Google it, maybe Google AI will give me the answer. Ah, yeah, there it is. The Veloca Coaster. Oh my gosh. One of my favorites. They have multiple induction launch points uh in various different positions on that ride. So amazing. I mean, that's how you really get that that that like torque, right? So, my guess is what they're going to do is they're going to launch this up a ramp. They're going to use that roller coaster induction power, which is actually exactly what's in most I mean, I would say all of the Tesla motors, the little induction motors. Uh it's kind of great. But anyway, you're going to launch this puppy off a ramp. Probably make it like spin by having some boosters on one side, you know, power uh uh boosting down. In addition, maybe you've got a jet engine on the back or something that just really launches this fast. You know, you get to like I mean, you know, if you take a a fighter jet and you take off, you could get up to 200 knots pretty freaking fast. So you could be going 2 250 m an hour off this ramp. You give a little bit of a boost from one side. It flips and rotates and then you boost again because now you're upside down and you flip it back the other way. And if you boost just enough, maybe you'll actually be able to stick the landing. So technically the vehicle will be airborne but apparently it is designed in such a way that you can't actually have anybody inside of it because the engines or the thrusters are too loud. Take a look at this. Musk said the vehicle's ability to fly would come from cold gas thrusters developed with SpaceX. So you could have some kind of combination here, right? This is so crazy. Um, this is pretty remarkable actually. Uh, cold gas thrusters would generate high pressure gas that can create significant noise and vibrations. As a result, the car will be operated remotely without anybody inside because apparently it's going to be too loud and these boosters are so strong that they could actually damage your eardrums. So obviously this, you know, showoff event isn't expected to be any kind of, you know, vehicle that you're actually going to buy. Certainly not for $250,000. You're not going to get any kind of jet rocket boosted car for $250,000 that flies. uh the closest thing to a dare I call it a consumerra uh jet that uh you know has a parachute would be like a Cirrus Vision jet. Those retail for about $4 million. You're still taking these off obviously on a runway. But this is generally what people look at when they look for like an owner operated flying car if you will. It's not technically a flying car. It's a jet. It's a single engine jet. Uh, it has a parachute in it. It is one of It's probably It might be the most economical price for a new jet at 4 million bucks because typically, you know, you're looking at, well, I guess you could get like a Phenom 100. Those have two engines. Uh, those are somewhere around 4 to 5 million. Phenom 300's are going the new ones are going for like $15 million now. It's crazy, you know. And then you get into like the smaller paraders. Uh and then and then up up from there into the $50 to $80 million range where your Gulf Streams and that are. But you know, these still require a substantial amount of licensing to actually be able to fly. So So we don't actually think people are going to be flying anything. I think this is a a demo is what it is. So here, take a look at this. Uh and I think that's actually interesting. That's exactly what they mention right here in sort of their own words. I didn't read this part earlier. Still, the Roadster could serve as a symbolic bridge between uh two parts of Musk's empire, Tesla and SpaceX. That's exactly what this is. I mean, everybody could see that from a mile away. You're going to see this event from like a mile away, too, because apparently it's going to be too loud. Uh but a formal merger between the companies seems like a growing possibility. Yes, exactly. All right, so let's talk about that. A lot of people have asked me, Kevin, but Kevin, you said that you think Tesla stock is going to go down and then Elon is going to end up buying it for cheap with SpaceX stock, which he just completed the acquisition of Curser with Space using SpaceX stock. They issued like 368 million shares of SpaceX to go buy U Cursor. That could happen. So, you could have both ways go here, or you could actually have Elon pump Tesla to the detriment of SpaceX shareholders if Tesla's not hitting its milestones. Right? So, somebody's potentially going to lose unless somehow stars really align. I'll show you how that could work. So, for example, if Tesla goes down, okay, so Tesla stock falls because you know vehicle deliveries are going down. The Optimus robots are taking longer than expected. FSD as robo taxis isn't really going anywhere and FSD subscriptions are slow and energy is slow because rates are high. Right? All that just naturally is going to drive the stock down because the fundamentals are deteriorating. Right? In that case, SpaceX uh in my opinion would be able to purchase Tesla for a lower valuation. Best case scenario for how it happens with SpaceX is that SpaceX's valuation goes up a lot on, you know, annual recurring revenue from anthropic or open or whatever, right? Uh and then it's the least dilutive possible. So to be extreme, let's just say SpaceX goes to $1,000 per share, and I'm being extreme. I'm not forecasting this. I'm being extreme on purpose, just show Tesla goes down to 100. You're not really going to feel the dilution over here because at this case, you know, SpaceX, which is like a what $1.7 trillion cap right now, uh would have to into a,000. I mean, you'd have to like 7x. So 17 * 7, you know, you'd be about a $12 trillion company over here. Really quick rough math. And then if I look at Tesla's market cap right now, which is trading for 1.34, if I divided that by about 3.3, I get to about $400 billion, right? Like in this example, the dilution for SpaceX to buy Tesla would really only be issuing shares worth 3% of the company. So you could take 3% of SpaceX and acquire Tesla. Heck, even if it didn't go to $100, right? Even if it stayed at $300 in this example and it was, you know, the $1.4 billion or whatever times uh in this case we did times three, it's still only a 10% dilution to SpaceX at this example, right? So, this is one possibility. Given that Elon has a lot of shares over here, he'd make more money on the SpaceX stock anyway than he would on getting his stock comp at Tesla. And given that he has control over at SpaceX, it doesn't really matter anyway because he could just issue himself more Stockcom. Who cares? He'll just issue himself more comp. Okay. The other scenario uh which is also a possibility. Both options exist. The other scenario is uh the one the Wall Street Journal was kind of suggesting and this is where Tesla stock could potentially get uh some kind of premium valuation where SpaceX says look we're going to pay 2x today's market cap whatever. So we're going to pay $2.7 billion for Tesla. Okay. Now it's like a $670 stock. This would either require SpaceX paying a massive premium or Tesla fundamentals really improving. In the last scenario I gave, what you actually have is Tesla shareholders suffering because the fundamentals are deteriorating and SpaceX is getting a deal. So in the last scenario, SpaceX shareholders win by buying Tesla at a discount and Tesla shareholders lose because the fundamentals deteriorated. in this scenario which could either occur because SpaceX wants to pay a premium uh or Tesla uh and its fundamentals improve materially. Well, in that example, let's say you get bought out at 670 bucks a share. Now, SpaceX is going to have to issue a whole lot of stock to absorb that. So, let's just say in this case, SpaceX is still a 12 trillion company in this example. that would still represent uh issuance of about 22 a.5% of SpaceX stocks to to acquire Tesla. The problem right now is the valuations are too close. You would really be crushing SpaceX stock to acquire which is the direction it would happen. Tesla's not going to acquire SpaceX because Elon controls shares at SpaceX. So, we know it's going to be SpaceX acquiring Tesla. There's no question of that. But the issue is, you know, SpaceX is a $2 trillion cap right now. So you can't really pay 2.7 now. You can't even really pay two right now because you'd be doubling your outstanding stock over at at SpaceX. Be too dilutive for now. So best case scenario for Elon is just to keep doing these marketing events between now and some eventual future where either Tesla stock goes down or SpaceX goes up a lot. And so Elon is protected in either example. Now, worst case scenario for Elon is both of them go down. Uh the other option is both rise and he just doesn't merge them, right? Uh so both rise, no merger, both fall, probably no merger. SpaceX up, Tesla down. SpaceX goes and buys Tesla. uh SpaceX up a lot and Tesla also up. Sure, pay a premium for it. That works too, right? So, those are the scenarios. You could table those out if you want, but that's that's my take on the scenarios. But really, this flying car stuff from an individual licensing point of view for people to actually get licensed to fly a flying car that you could take off from still a runway like you'd probably I mean, you'd almost certainly, unless it's a EV tall, you'd almost certainly still have to go to an airport to take off. So you could actually get either vetored out or get a flight plan from air traffic control so you're not just yoloing it into the airspace, right? You can't just take off from a highway. Uh um that's going to take a lot of licensing. So I don't see that happening. And based on the description of this article, that's not what the intention here is anyway. The intention here is to show off how you can put rockets on a car and have nobody in it and do cool stuff. It's very James Bond meets like Joe Roganesque. It's like, damn, that's cool. You know, it's like it's like shooting a compound bow at the side of a cybert truck to see if it's going to go through. It's like, yeah, I kind of want to do that, too. Or shooting a Tommy gun at the side of the Cybert truck, right? Anyway, um the article does go on to say no official date for deliveries for the actual Roadster. There's been talk about it, you know, uh, basically previously Elon has talked about how this Roadster can instantaneously go from like 0 to 60. Uh, this has been talked about in podcasts before where it's like, "Oh, well, how fast can can the car really go to 60?" Elon's like, "Instantly." The idea here is some form of either massive compressed air and then you build that up for a real launch boost or you put some kind of thruster on which is kind of crazy. Uh and again too loud for people to actually sit in. So another marketing stunt very interesting and it's also quite bizarre that it happens on the meet Kevin membership. O Elon coupon expiration day. Thanks so much for being here. We'll see you in the next one. Goodbye and good luck. >> Why not advertise these things that you told us here? I feel like nobody else knows about this. >> We'll we'll try a little advertising and see how it goes. >> Congratulations, man. You have done so much. People love you. People look up to you. >> Kevin Papra there, financial analyst and YouTuber. Meet Kevin. Always great to get your take.