We’re happy to see Tesla investing in the business and want them to have as many cars on the road as they possible can: Analyst

Tasha Keeney ARK Invest Analyst joins the Yahoo Finance Live panel to discuss the latest Tesla news as the company plans to raise up to $5 billion in share offering, its second in three months.

Video Transcript

AKIKO FUJITA: Let's turn our attention back to Tesla right now. The shares coming off of its session lows, but it is still down about 1.9%. The company announcing plans to raise $5 billion in a share offering for the second time in three months. In an SEC filing, the company said the additional shares will be sold from time to time at the market price. Let's bring in Tasha Keeney. She's an analyst at ARK Investments.

Tasha, it's always good to talk to you. It seems like investors, I don't know, it's down about 2% right now, so not exactly happy about the news here, but how should we be looking at this announcement from Tesla? Is this just about the company trying to take advantage of where the shares have been trading at-- it's seen a huge run up in valuations-- or should people be concerned that the company is looking to raise capital yet again?

TASHA KEENEY: Well, you know, as we've talked about many times before, ARK Invest, Tesla has been a top position for us for some time. And as we look to the future, you know, one of the things that we've been talking about for years is this robotaxi opportunity. So if you think of this capital raise, really, it's just another way for Tesla to build more cars, get more cars on the road that can act as these data centers, like help train autopilot, and accelerate potentially that timeline to launching a robotaxi network, which we think could be extremely profitable. So as investors, we're happy to see, you know, Tesla investing in the business, and we just want them to have as many cars on the road as they possibly can get.

ZACK GUZMAN: Yeah, and Tasha, I mean, it's crazy to think how far it's come, right, since they were strapped for cash, what, last year. $2.2 billion in cash on hand back then. We were talking about troubles at Tesla and what they were going to need to do to raise cash. And now, we're talking about a third capital move here this year. Talk to me about what that means for some of those more ambitious things that you're talking about, whether it is self driving or other plans that Elon Musk has here since, you know, for one thing, when he was strapped for cash, he beat more traditional metrics that would just be rolling out more cars. But now, it seems like everything's on the table when he's flushed with it.

TASHA KEENEY: Yeah, well, you know, as we talk about profitability, certainly something like a human driven ride hail network, which I actually just wrote about in an article that we just published to our site, and eventually a robotaxi network could be extremely profitable business lines, and this will be a recurring revenue stream. You know, it's a total transformation of what Tesla's business model is today, which is mainly, you know, one off vehicle sales. They have some software sales, but this is an opportunity for that to become a much larger percentage of the business.

So we think, you know, that autonomous future could really help with profitability. And even sooner, they could potentially launch a ride hail network with human drivers in preparation for that robotaxi service without necessarily clearing that technological hurdle of solving for fully autonomous driving, which we know is quite difficult. So we think that, you know, in the near future if they wanted to do this, they could.

AKIKO FUJITA: And Tasha, you've had one of the more aggressive price targets on the stock. I think the last time you spoke, you said long term by 2024, you expected Tesla to be valued at $7,000 a share. How has that base case changed at all over the last few months, or do you think that thesis is still intact?

TASHA KEENEY: Yes, so I'd say our long term thesis is still intact, and for that 7,000, so that was before the split. So if you divide by five, that's about $1,400 per share. Of course, we're looking to update that number for 2025. You should look out for that work from us over the next few months. But what I will say is in terms of how our thinking has changed, again, is really thinking more about this ride hail opportunity and what it could look like if they were to launch that network sooner with human drivers behind the wheel.

So I think, you know, Tesla recently launched a beta version of their full self-driving software. They're sort of making the steps to get there. We're really excited about that autonomous future, and this year, Waymo has proved that it's possible by truly commercializing their autonomous taxi service in Arizona. So you know, this is, I think, a big opportunity when you think of what's not necessarily in the stock today. I do think that this is not necessarily included in a lot of analysts' estimates for the future.

ZACK GUZMAN: Yeah, looking more short term, I wonder if there's any risks. I mean, you'll hear it from the shrinking pool of Tesla bears out there that might point to, you know, the risks of taking your eyes off the short term price here. We've seen Elon Musk try and stress to his employees that it's still going to be important to focus in on profitability and to make sure that you're not wasting money here. But with more of it there and still building out, you know, those two plants that we're watching play out in Texas and around in China as well, talk to me about some of those risks if they do kind of run ahead of costs on those projects or what you're trying to watch there in terms of grading how those build outs are going.

TASHA KEENEY: Well, you know, I'd say broadly when we look at Tesla, it's really an innovation story. So ARK invests in disruptive innovation broadly, and this is why Tesla is one of our top holdings. So I do think it is important to keep your eye on the long term versus for it to potentially be these quarter to quarter numbers. That said, you know, Tesla does have very ambitious plans in terms of scale. We've also seen them accomplish incredible things.

I mean, look at what they've done in China. It's the first wholly owned manufacturing facility there up and running in record time. And now actually, they have the highest market share in electric vehicles in that market. So I think, you know, in looking towards that expansion, I think we can only trust sort of what we've seen Tesla done so far, which has been quite impressive.

AKIKO FUJITA: Tasha Keeney joining us from ARK Invest. Always good to talk to you and break down the numbers from Tesla. Thanks so much for your time.

TASHA KEENEY: Thanks for having me.