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Opinions on Elon Musk, the co-founder and face of of Tesla (TSLA) are usually strongly held, but decidedly mixed. Whatever you may think of him though, one thing cannot be denied: He is never afraid to put stuff out there.

That has occasionally got him in trouble, but it can also create opportunity for potential investors as bad news gets priced in early. Friday’s huge drop in the stock is a case in point.

That drop came as Musk announced a cut of around three thousand to Tesla's workforce. For a company that derives much of its appeal from its current and potential growth, a cut like that is bound to have a negative effect on the stock, and that wasn’t the only bad news. The e-mail that was sent to employees and subsequently made public also warned that Q4 2018 profits would probably be less than in Q3.

As you can see, the stock plummeted, losing around $45 or close to thirteen percent on the day.

In some ways that is understandable but, as is so often the case with TSLA news, there is another way of looking at it. The profit warning obviously affects the short-term value of the stock, but doesn’t explain a drop of that magnitude, so there was obviously a negative reaction to the cut in the workforce.

As I said, the growth profile of Tesla makes a negative reaction to job cuts almost inevitable, but in context it isn’t that big of a deal and can even be looked at as a positive development.

The cut works out to be about seven percent of the workforce at the company, which sounds bad until you consider it in the context of thirty percent job growth last year. With that in mind, the cuts look more like an adjustment to last year's overly optimistic view than anything else. That, and the fact that TSLA’s value is all about the future, suggest the stock’s plunge on Friday looks massively overdone.

Some may maintain that this is the problem with TSLA, that everything is based on what might be, not what is. If that is truly the case, then Friday’s announced cuts could be seen as good news, not bad. It is a sign of a new spirit of realism at the company and a focus on cost control that many people would say was long overdue. Big institutional investors, who currently hold over sixty percent of the stock, have been calling for cost reductions for some time and if this is seen as a move in that direction, it will ultimately be supportive of TSLA stock.

The other thing that suggests that TSLA at around $300 again is a great opportunity is the news over the weekend that the Model 3 has been cleared for deliveries in Europe. Tesla estimates the market for luxury electric sedans to be bigger in Europe than in the U.S., so a strong argument can be made that access to that market is far more important for long-term growth than an adjustment to current staffing levels.

The thing is, investing in Tesla is about taking a bet on the future, not just of that company, but also of the auto industry more broadly. We are moving inexorably towards a day when the majority of vehicles are no longer powered by gasoline and it is now clear that electric vehicles (EVs) are going to dominate that move. Tesla is not the only company in that business, as every car manufacturer is now committed to EVs to some extent, but they have a significant head start that should serve them well for quite a while.

Without this news, buying TSLA before they release earnings next week would have been a very risky proposition. The spectacular Q3 results moved expectations for Q4 to a point where disappointment was likely and, as we saw on Friday, disappointment can have an outsized effect on the stock.

Now though, with that out of the way and expectations adjusting rapidly downward, the downside risk of next week’s earnings is reduced. Add in the good news over the weekend and this looks like a decent entry point for long term investors rather than the beginnings of a collapse.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.