Author Topic: TSLA - Tesla Motors  (Read 777490 times)

A Dhandho Investor

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Re: TSLA - Tesla Motors
« Reply #3440 on: February 13, 2020, 07:18:12 AM »
The dude owns what % of the company? What amount would've made a difference?

I would have expected him to contribute approximately $69.420.420.

But seriously, the fact that Larry Ellison, whose net fortune is about $69b (no pun intended this time), contributes the full $1m, I hope you agree that that is just for the headlines?


Liberty

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Re: TSLA - Tesla Motors
« Reply #3441 on: February 13, 2020, 07:27:01 AM »
The dude owns what % of the company? What amount would've made a difference?

I would have expected him to contribute approximately $69.420.420.

But seriously, the fact that Larry Ellison, whose net fortune is about $69b (no pun intended this time), contributes the full $1m, I hope you agree that that is just for the headlines?

Sure. That's how finance works.
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TwoCitiesCapital

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Re: TSLA - Tesla Motors
« Reply #3442 on: February 13, 2020, 07:28:45 AM »
I see 2 possible reasons, the fact that they did not find anyone willing to put up $5b and/or the fact that Elon does not want the float to increase by too many shares.

The 10K is out and it appears that Tesla's general counsel left (on December 6) just 2 days after the SEC issued a subpoena on a new investigation into TSLA's financials (on December 4). Does not sound like coincidence.

The investigation also started 12 days after Einhorn asked Elon questions on the accounts receivable balance and the 10K now includes an explanation linked to the fact that "Accounts receivable primarily include amounts related to receivables from financial institutions and leasing companies offering various financing products to our customers".

Channel stuffing anyone?

Maybe. I mean, I get being tactical. I think this is a smart move for them, but it also comes 2 weeks after Musk said they wouldn't be raising capital AND it's a pittance relative to their spend/R&D/EV.

Like why even do it all if you're only going to raise $2B?

Gregmal

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Re: TSLA - Tesla Motors
« Reply #3443 on: February 13, 2020, 07:32:02 AM »
This is again amusing and an exercise in mental gymnastics. So Tesla equity raise is widely deemed a "smart move". Ok, Why? Because the stock is overvalued. The result? Stock trades higher...

Dalal.Holdings

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Re: TSLA - Tesla Motors
« Reply #3444 on: February 13, 2020, 07:38:52 AM »
The dude owns what % of the company? What amount would've made a difference?

I would have expected him to contribute approximately $69.420.420.

But seriously, the fact that Larry Ellison, whose net fortune is about $69b (no pun intended this time), contributes the full $1m, I hope you agree that that is just for the headlines?

Strong work from our twitter wannabe detectives here. Seemed to have moved on from musks’s margin calls, demand cliffs, car fires, elon’s tweets, unintended acceleration to...elon and larry should have put up more cash. Thesis creep is a wondrous thing. So is the capacity for dogmatic behavior. Keep on pounding it in.

Wonder what would happen if any other business had this level of scrutiny. The Buffett quote about “if a cop follows you on the highway for 500 mi you will surely get a ticket” rings true. Fortunately these are no cops, but just sad TSLAQ people who waste away their life on attacking this co and ceo with not just opportunity costs but real $$$ costs to show for it!

Liberty

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Re: TSLA - Tesla Motors
« Reply #3445 on: February 13, 2020, 07:40:05 AM »
This is again amusing and an exercise in mental gymnastics. So Tesla equity raise is widely deemed a "smart move". Ok, Why? Because the stock is overvalued. The result? Stock trades higher...

The stock trades higher (or at least flat) because the new capital derisks the future. Reflexivity at work.

Quote
I think this is a smart move for them, but it also comes 2 weeks after Musk said they wouldn't be raising capital AND it's a pittance relative to their spend/R&D/EV.

As for not saying that you're going to raise capital before you actually raise it, that's just common sense and something that every company does. Otherwise, you just increase your cost of capital...

And clearly they think that it's either enough to get them to a place where internally generated capital will be enough, or that there'll be enough progress in the meantime that the next capital raise will be even less dilutive. Of course, they could be wrong about one or both things, but there's no shortage of people being wrong about this company in all directions, so it wouldn't be a first.
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Gregmal

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Re: TSLA - Tesla Motors
« Reply #3446 on: February 13, 2020, 07:53:58 AM »
If $2B derisks the future for a $150B EV company, why not just do an ATM? Or better yet, one of those absurd 10-15y convertible offerings that carries a 0.5% interest rate?

Liberty

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Re: TSLA - Tesla Motors
« Reply #3447 on: February 13, 2020, 08:02:41 AM »
If $2B derisks the future for a $150B EV company, why not just do an ATM? Or better yet, one of those absurd 10-15y convertible offerings that carries a 0.5% interest rate?

I meant it as in it "lowers risk", not "fully eliminates risk".

And I'm not saying they're running the cap table the way I would do it, obviously they've always been very aggressive and always cut it close. But things are certainly less risky with $2bn extra on the balance sheet than without it.

And a lot of what they're spending is within their control -- they didn't have to go at that speed, they could've milked the Model S for a few more years before even embarking on the 3, and they could've elongated the 3 ramp up by a few years, and waited some more for the Y and to design the Semi and build other factories and so on... But clearly speed is a very high priority for them, and so far it has benefits too -- hard to find an EV that's even as good as the 2012 Model S, so their pace is hard to keep up for others.
« Last Edit: February 13, 2020, 08:09:30 AM by Liberty »
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TwoCitiesCapital

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Re: TSLA - Tesla Motors
« Reply #3448 on: February 13, 2020, 08:05:11 AM »
This is again amusing and an exercise in mental gymnastics. So Tesla equity raise is widely deemed a "smart move". Ok, Why? Because the stock is overvalued. The result? Stock trades higher...

The stock trades higher (or at least flat) because the new capital derisks the future. Reflexivity at work.

Quote
I think this is a smart move for them, but it also comes 2 weeks after Musk said they wouldn't be raising capital AND it's a pittance relative to their spend/R&D/EV.

As for not saying that you're going to raise capital before you actually raise it, that's just common sense and something that every company does. Otherwise, you just increase your cost of capital...

And clearly they think that it's either enough to get them to a place where internally generated capital will be enough, or that there'll be enough progress in the meantime that the next capital raise will be even less dilutive. Of course, they could be wrong about one or both things, but there's no shortage of people being wrong about this company in all directions, so it wouldn't be a first.

Then you don't answer the question directly or say it will be dictated by market availability and company needs or come up with some other BS non answer like every other corporate executive does. You don't make an outright lie.

Musk has massive credibility issues and this is just another check mark against him. How anyone can trust this guy is beyond me.

1) Taking private/funding secured. Lies
2) Bought SolarCity for the "synergies" and not for the conflicts of interest. Lies.
3) "Everything is fine, and liquidity concerns are overblown" while self-admittedly being days away from running out cash? Lies.
4) Raising capital right after you said you wouldn't raise capital? Lies

Probably another half dozen things that could be added to the list that weren't outright lies but incredibly disingenuous and misleading statements/actions.

He's a brilliant dude, but totally and consistently untrustworthy. How the board or the shareholders is ok with him leading the company is beyond me - but I guess they're all just blinded by the money his lies have produced for the...

Is lying only wrong if it loses a company money?

Liberty

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Re: TSLA - Tesla Motors
« Reply #3449 on: February 13, 2020, 08:12:08 AM »
This is again amusing and an exercise in mental gymnastics. So Tesla equity raise is widely deemed a "smart move". Ok, Why? Because the stock is overvalued. The result? Stock trades higher...

The stock trades higher (or at least flat) because the new capital derisks the future. Reflexivity at work.

Quote
I think this is a smart move for them, but it also comes 2 weeks after Musk said they wouldn't be raising capital AND it's a pittance relative to their spend/R&D/EV.

As for not saying that you're going to raise capital before you actually raise it, that's just common sense and something that every company does. Otherwise, you just increase your cost of capital...

And clearly they think that it's either enough to get them to a place where internally generated capital will be enough, or that there'll be enough progress in the meantime that the next capital raise will be even less dilutive. Of course, they could be wrong about one or both things, but there's no shortage of people being wrong about this company in all directions, so it wouldn't be a first.

Then you don't answer the question directly or say it will be dictated by market availability and company needs or come up with some other BS non answer like every other corporate executive does. You don't make an outright lie.

Or he changed his mind since then because the facts changed? It's very possible he had no plans for it at the time, but since then the stock went up like a zillion percents and China and part of the rest of the world shut down and who knows when that'll end, maybe the risk/reward of raising capital changed a bit.
"Most haystacks don't even have a needle." |  I'm on Twitter  | This podcast episode is a must-listen