David Trainer, Founder and CEO of New Constructs
David Trainer is a Wall Street veteran and corporate finance expert. He specializes in reversing accounting distortions on the underlying economics of business performance and stock valuation. He was a member of FASB’s Investor Advisory Committee from 2013-2017 and is author of Modern Tools for Valuation (Wiley Finance 2010). David founded New Constructs to use the latest Natural Language Processing technology to identify and analyze every data point in an SEC filing from the MD&A, financial statements, and footnotes. New Constructs covers over 3000 stocks, 7,000 mutual funds, and 400 ETFs by leveraging its Robo-Analyst technology.
#1 Morning Stock Show To Get You Ready For The Stock Market Open, PreMarket Gainers, Earnings This Week, Economic Data & More! Benzinga PreMarket Prep 8:00AM ET- 9:00AM ET BenzingaTV on YouTube.
David Trainer is a Wall Street veteran and corporate finance expert. He specializes in reversing accounting distortions on the underlying economics of business performance and stock valuation. He was a member of FASB’s Investor Advisory Committee from 2013-2017 and is author of Modern Tools for Valuation (Wiley Finance 2010). David founded New Constructs to use the latest Natural Language Processing technology to identify and analyze every data point in an SEC filing from the MD&A, financial statements, and footnotes. New Constructs covers over 3000 stocks, 7,000 mutual funds, and 400 ETFs by leveraging its Robo-Analyst technology.
#1 Morning Stock Show To Get You Ready For The Stock Market Open, PreMarket Gainers, Earnings This Week, Economic Data & More! Benzinga PreMarket Prep 8:00AM ET- 9:00AM ET BenzingaTV on YouTube.
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00:00 - David Treanor, founder and CEO of New Constructs.
00:03 It's good to have you, David.
00:04 Of course, you probably watched our lovely Tesla video
00:07 dragging some kind of trailer there
00:11 and really competing against Ford there.
00:13 Two Ford trucks that it beat.
00:16 Recent price action.
00:17 How do you see Tesla, David?
00:20 - Yeah, you know, look, I think the Cybertruck,
00:22 I have to agree with Dennis.
00:25 I mean, it is hideous.
00:26 - You don't wanna go to Mars?
00:29 You don't wanna go to Mars, man?
00:30 - It looks like it should go to Mars, that thing.
00:33 - Yeah, I think those are the future Mars.
00:36 - Mars has been a distraction from the struggles
00:39 in the Tesla business for like five or six years.
00:42 I mean, I remember he used to miss production goals
00:43 and say, "Oh yeah, but we're going to Mars."
00:45 And it's like, yeah.
00:46 Don't pay attention to what this hand is doing.
00:49 Just look at this hand, right?
00:51 I mean, that's kind of,
00:52 and a Cybertruck just feels like another one of those.
00:55 I also agree with Dennis.
00:56 A lot of those pre-orders may not be actually filled.
01:00 I just don't know if the underlying utility
01:01 of that truck is as good as what it's hyped up to be.
01:04 I just don't know how many people
01:05 wanna spend over $100,000 for a gimmick.
01:07 - There was a tweet from Gene Munster,
01:09 who we also follow too,
01:10 and he follows his company very closely.
01:12 And I just found it interesting as well,
01:14 trying to just refine that tweet here right now.
01:17 But Gene said last night,
01:18 "My sense is," this is from Gene Munster,
01:20 who we've had on the show lots of times,
01:22 "My sense is by the end of 2025,
01:23 "pricing will come down by 25%.
01:26 "This is talking for the Cybertruck,
01:27 "as production efficiency improves.
01:29 "At that point, sales should start to ramp."
01:31 That means the first big year for Cybertruck
01:33 will likely be 2026.
01:36 So I mean, you're looking out almost three years
01:39 before you're going to get a real earnings boost here
01:42 from the Cybertruck.
01:43 And that's from Gene Munster,
01:44 who is often very bullish with his forecast there.
01:49 So I mean, you're looking at it here,
01:52 it doesn't feel like the Cybertruck
01:54 is coming to save the stock anytime soon
01:56 after listening to Gene Munster.
01:58 We've got the little pre-event pop, which you usually do,
02:00 and now you get the after math,
02:02 where it often sells off after this event here.
02:05 David, you follow his company,
02:06 talk the fundamental story here.
02:08 I mean, obviously the multiple here
02:10 has been extreme for a very long time.
02:13 A lot of people believe things like the Cybertruck
02:15 are going to allow Tesla to grow into that multiple.
02:17 Talk just the fundamentals about Tesla,
02:21 the business, not just the Cybertruck.
02:23 - Yeah, look, even Musk has said the thing,
02:26 the Cybertruck won't be free cashflow positive
02:28 for several years, right?
02:29 And I have a hard time believing that it's going to do,
02:33 even what Gene Munster says, and you're right,
02:35 he is like the most, among the most bullish folks
02:39 out there on Tesla.
02:40 And frankly, as someone who focuses on the fundamentals,
02:44 I continue to just be bewildered
02:47 by how positive people can be.
02:48 I think this is because we live in a time
02:51 where people want to believe
02:52 that there's some magic man out there
02:53 who can solve all of our problems
02:55 so that we don't really need to worry.
02:57 I think that's just, Musk is just filling that role,
02:59 like that he's just going to magically fix things
03:01 and he's going to be the best person on earth
03:04 for the environment and all this just ridiculousness
03:07 because people honestly are just too lazy
03:09 to recognize that there's real problems out there
03:11 that no one person can fix.
03:13 And that's sort of what I see
03:16 when I look at the fundamentals of Tesla
03:18 and I see just how limited the profitability is.
03:22 Yes, they did get to some marginal level of profitability.
03:25 It's way worse when you take out those regulatory credits,
03:28 which everyone believes are not sustainable.
03:30 And then when you look at the valuation,
03:33 it implies that Tesla's going to own something like 70 to 80%
03:36 of the entire electric vehicle market.
03:39 Okay, I'll say that again.
03:41 The stock price implies that Tesla will own 70 to 80%
03:45 of the entire electric vehicle market.
03:48 That's what they got to do to justify the price.
03:50 So when you say, yeah, the multiple's high
03:51 and the Cybertruck's going to help fill the gap,
03:53 I say, no way, it's not even close.
03:56 And it's been like this for a while.
03:58 This is one of the original meme stocks
04:00 and look, Musk is the master of hype.
04:03 He is the modern day snake oil salesman, right?
04:06 With a bigger microphone than anyone has ever had
04:08 in the history of the world, he's good at using it.
04:10 I mean, just look at what he did in that interview.
04:12 Did the day with-
04:13 - Did you watch that interview, David?
04:14 What were your thoughts in that interview?
04:16 - People respect- - What is dropping F words
04:18 on CNBC?
04:19 What are your thoughts?
04:21 - I was dumbfounded.
04:22 I was like, this is people, what?
04:24 Like, and I think the crazier he acts, it's like a cult.
04:28 The crazier he acts, the more they have to be behind him.
04:31 'Cause they're in so deep, they can't bail out now.
04:34 - That's true. - So the more that he just
04:36 is like, oh, wow, there's like,
04:37 oh, he just must be a genius.
04:39 I'm like, no, this guy's not a good dude, right?
04:42 - I have a big question on that.
04:43 And of course you guys see the chart here.
04:46 Will we ever get back towards that 400?
04:48 Do you think we ever get back there, David?
04:50 I mean, that's pretty long ways away now.
04:52 - I mean, look, with this stock, you never know, right?
04:56 I mean, I'm like- - Well, there's a good point
04:58 there too.
04:58 I think we should take that. - That's true.
05:00 - With this stock, you never do know
05:01 because this stock is such a storied stock.
05:04 And you're right, like what they were saying
05:05 about the meme, you know, the original meme stock.
05:08 I mean, this was the original social media darling
05:10 before GameStop, before AMC.
05:13 It was Tesla was the driver, like in social media,
05:16 everyone talked about this stock.
05:18 So I mean, it has always got that premium
05:21 because it is the social media darling.
05:24 You know, the Cathie Wood, you know what?
05:26 It made Cathie Wood.
05:27 I mean, without Tesla, Cathie Wood is a big nobody.
05:30 I mean, it made her. - Tesla made a lot of people.
05:33 I think Tesla made a lot of investors.
05:35 - It did. - And that's why
05:36 they're so dedicated.
05:37 But I also think the bigger sort of the hype,
05:39 the harder it can potentially fall.
05:41 So when the bloom comes off the rose,
05:44 I think this one could be a real sinker.
05:46 And it feels like Musk is sort of tumbling
05:49 toward that eventuality as he sort of gets
05:53 more and more eccentric and unhinged.
05:56 I wanna make a really good point though about that.
05:57 - He's always kind of been eccentric and unhinged.
06:00 So to Mitch's point, that probably helps his sales
06:02 'cause there's so many love that he tells
06:04 the major media to go F themselves.
06:06 He loves, you know, that tells the advertisers
06:09 to go F themselves.
06:10 - There's a lot of people that actually love that.
06:12 I was in shock by it.
06:13 I'm sitting there, I'm like, holy,
06:15 I've never heard a public CEO go on to a business network
06:20 like CNBC and tell advertisers to go F themselves.
06:24 This is just a whole other level.
06:26 Anybody and anybody gets fired for that immediately.
06:29 But I mean, he's the CEO and this is how he runs his company
06:33 and a lot of people really applauded it.
06:35 So it was mixed review.
06:36 Some people were in shock like me
06:37 and a lot of people thought, no,
06:38 this is going to actually drive his stock higher here
06:42 because the people on social media love it.
06:45 - Well, I think they're all in.
06:48 They gotta love it.
06:49 They don't have a choice.
06:50 You know, either they have to recognize
06:51 that the guy's probably a little bit crazy
06:54 and really full of himself
06:55 and that they really shouldn't be trusting
06:58 their money with him or they just gotta go deeper in.
07:00 And that's what he's doing.
07:01 The more eccentric he gets,
07:03 the more he's drawing the cult followers deeper in.
07:06 'Cause again, either you gotta quit it
07:08 or you gotta love it.
07:10 And I think he's just, you know,
07:13 he just keeps drawing them more deeply in
07:15 by doing more and more ridiculous things.