Author Topic: TSLA - Tesla Motors  (Read 777507 times)

TwoCitiesCapital

  • Hero Member
  • *****
  • Posts: 2338
Re: TSLA - Tesla Motors
« Reply #3450 on: February 13, 2020, 08:53:45 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.

Possibly.

But I'm skeptical that a follow on offering for $2-2.3Billion is something that gets put together overnight. The banks have to get their shit in order too - not as simple as Tesla deciding they want money and getting it.

It was 10 business days between when he announced he wouldn't be selling stock and when the stock was offered.

 If we're being realistic, they were probably getting all of the paperwork for the follow-on offering together while he was actively saying they weren't. That's certainly more in tune with his prior actions and character than telling the truth and changing his mind is ...
« Last Edit: February 13, 2020, 08:55:56 AM by TwoCitiesCapital »


Kaegi2011

  • Newbie
  • *
  • Posts: 45
Re: TSLA - Tesla Motors
« Reply #3451 on: February 13, 2020, 09:03:12 AM »

But I'm skeptical that a follow on offering for $2-2.3Billion is something that gets put together overnight. The banks have to get their shit in order too - not as simple as Tesla deciding they want money and getting it.


Maybe not overnight, but for public issuers, particularly seasoned ones, it can be very, very quick, esp right after earnings.  I've not done follow on equity offerings, but having done it on the credit side it's really fast. 

oddballstocks

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 2258
    • Oddball Stocks Blog
Re: TSLA - Tesla Motors
« Reply #3452 on: February 13, 2020, 10:33:09 AM »

Is lying only wrong if it loses a company money?

We live in a society that praises lying (Trump, Musk) and doing whatever it takes to win.  Truth is dead...

There are many on here who would rather win (stock appreciation) no matter the cost than have principles.  And in a society that exalts money above all else the incentives sort of speak for themselves.
The ultimate edge for bank investors: http://www.completebankdata.com

Liberty

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 11732
  • twitter.com/libertyRPF
    • twitter.com/libertyRPF
Re: TSLA - Tesla Motors
« Reply #3453 on: February 13, 2020, 11:16:13 AM »

But I'm skeptical that a follow on offering for $2-2.3Billion is something that gets put together overnight. The banks have to get their shit in order too - not as simple as Tesla deciding they want money and getting it.


Maybe not overnight, but for public issuers, particularly seasoned ones, it can be very, very quick, esp right after earnings.  I've not done follow on equity offerings, but having done it on the credit side it's really fast.

Not my world, so I don't know, but I would be surprised if it took very long, looking at how certain companies are opportunistic with both debt issuance, refinancing, and equity issuances...

In any case, all I'm saying is that you don't know, but we know that things changed a lot pretty quickly, so it's not implausible to say that his thinking could have changed quickly too.

Musk certainly has done many questionable things, but his detractors often will interpret everything with the least charitable version. To them, he can't do anything right... To me that sounds like a conclusion looking for a  backfilled justification, which is bad faith and dishonest thinking. For a guy that has been accused of selling hot air and being on the verge of bankruptcy and collapse for a decade, I'd say that maybe some people are miscalibrated vs the facts on the ground.
"Most haystacks don't even have a needle." |  I'm on Twitter  | This podcast episode is a must-listen

Kaegi2011

  • Newbie
  • *
  • Posts: 45
Re: TSLA - Tesla Motors
« Reply #3454 on: February 13, 2020, 11:46:05 AM »

In any case, all I'm saying is that you don't know, but we know that things changed a lot pretty quickly, so it's not implausible to say that his thinking could have changed quickly too.


For a company faced with the uncertainties that Tesla faces, shouldn't shareholders worry that management isn't doing their job if shares rise by 20% (or whatever) and they wouldn't at a minimum consider issuing more shares? 

TwoCitiesCapital

  • Hero Member
  • *****
  • Posts: 2338
Re: TSLA - Tesla Motors
« Reply #3455 on: February 13, 2020, 11:48:24 AM »

But I'm skeptical that a follow on offering for $2-2.3Billion is something that gets put together overnight. The banks have to get their shit in order too - not as simple as Tesla deciding they want money and getting it.


Maybe not overnight, but for public issuers, particularly seasoned ones, it can be very, very quick, esp right after earnings.  I've not done follow on equity offerings, but having done it on the credit side it's really fast.

Not my world, so I don't know, but I would be surprised if it took very long, looking at how certain companies are opportunistic with both debt issuance, refinancing, and equity issuances...

In any case, all I'm saying is that you don't know, but we know that things changed a lot pretty quickly, so it's not implausible to say that his thinking could have changed quickly too.

Musk certainly has done many questionable things, but his detractors often will interpret everything with the least charitable version. To them, he can't do anything right... To me that sounds like a conclusion looking for a  backfilled justification, which is bad faith and dishonest thinking. For a guy that has been accused of selling hot air and being on the verge of bankruptcy and collapse for a decade, I'd say that maybe some people are miscalibrated vs the facts on the ground.

Sure, I admitted that it was probably the right move.
 If I were him, I would have tried to do a BIGGER offering - one meaningful versus the size of the current company. I'm just disappointed that he did it less than two weeks after saying he wouldn't.

I don't go out of my way to look for reasons to dislike him - he's given me enough without me having to look.

The man is a genius, but also borders on being a charlatan. His detractors have been RIGHT about the financial conditions of his companies, but he has kept them going in no small part by misleading the public at those times.

Maybe we're all better of for his success - maybe the end does justify the means. But I could never trust the man with my money and have serious misgivings about trusting him enough to buy a car from him/his companies.

Who is to say he's not gonna throttle my speeds after the car turns 10 years old to force me to upgrade so the incremental revenues stave off bankruptcy once again? I can't say he will or won't - only that I don't trust him enough to risk it. 

Liberty

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 11732
  • twitter.com/libertyRPF
    • twitter.com/libertyRPF
Re: TSLA - Tesla Motors
« Reply #3456 on: February 13, 2020, 12:11:24 PM »

But I'm skeptical that a follow on offering for $2-2.3Billion is something that gets put together overnight. The banks have to get their shit in order too - not as simple as Tesla deciding they want money and getting it.


Maybe not overnight, but for public issuers, particularly seasoned ones, it can be very, very quick, esp right after earnings.  I've not done follow on equity offerings, but having done it on the credit side it's really fast.

Not my world, so I don't know, but I would be surprised if it took very long, looking at how certain companies are opportunistic with both debt issuance, refinancing, and equity issuances...

In any case, all I'm saying is that you don't know, but we know that things changed a lot pretty quickly, so it's not implausible to say that his thinking could have changed quickly too.

Musk certainly has done many questionable things, but his detractors often will interpret everything with the least charitable version. To them, he can't do anything right... To me that sounds like a conclusion looking for a  backfilled justification, which is bad faith and dishonest thinking. For a guy that has been accused of selling hot air and being on the verge of bankruptcy and collapse for a decade, I'd say that maybe some people are miscalibrated vs the facts on the ground.

Sure, I admitted that it was probably the right move.
 If I were him, I would have tried to do a BIGGER offering - one meaningful versus the size of the current company. I'm just disappointed that he did it less than two weeks after saying he wouldn't.

I don't go out of my way to look for reasons to dislike him - he's given me enough without me having to look.

The man is a genius, but also borders on being a charlatan. His detractors have been RIGHT about the financial conditions of his companies, but he has kept them going in no small part by misleading the public at those times.

Maybe we're all better of for his success - maybe the end does justify the means. But I could never trust the man with my money and have serious misgivings about trusting him enough to buy a car from him/his companies.

Who is to say he's not gonna throttle my speeds after the car turns 10 years old to force me to upgrade so the incremental revenues stave off bankruptcy once again? I can't say he will or won't - only that I don't trust him enough to risk it.

The great thing is you don't have to buy the stock, or short it, or buy the products, so you'll be fine.
"Most haystacks don't even have a needle." |  I'm on Twitter  | This podcast episode is a must-listen

TwoCitiesCapital

  • Hero Member
  • *****
  • Posts: 2338
Re: TSLA - Tesla Motors
« Reply #3457 on: February 13, 2020, 02:50:29 PM »

The great thing is you don't have to buy the stock, or short it, or buy the products, so you'll be fine.

....


All I did was challenge some unchallenged claims and then discuss the answers, which is exactly what a discussion forum should be. When everybody is sitting on the same side of the boat, bad things tend to happen. It's healthy to have diverging opinions, it sharpens thinking. I'd rather that newcomers and lurkers who come to a thread get various takes and make up their minds about which makes the most sense than have everybody all singing kumbaya and saying that everything is amazing while the stock underperforms the index by 150% over a decade.

Will the real Liberty please stand up? Where the F did this guy go so quickly?


TwoCitiesCapital

  • Hero Member
  • *****
  • Posts: 2338
Re: TSLA - Tesla Motors
« Reply #3458 on: February 13, 2020, 02:58:17 PM »

In any case, all I'm saying is that you don't know, but we know that things changed a lot pretty quickly, so it's not implausible to say that his thinking could have changed quickly too.


For a company faced with the uncertainties that Tesla faces, shouldn't shareholders worry that management isn't doing their job if shares rise by 20% (or whatever) and they wouldn't at a minimum consider issuing more shares?

I mean, if we're setting the bar that low (a ride of 20-30%), then 80-90% of companies would have had to considering issuing shares in 2013, 2017, and 2019.  Instead we got more and more buybacks each year...the exact opposite of what your suggesting here.

Kaegi2011

  • Newbie
  • *
  • Posts: 45
Re: TSLA - Tesla Motors
« Reply #3459 on: February 13, 2020, 03:31:49 PM »

I mean, if we're setting the bar that low (a ride of 20-30%), then 80-90% of companies would have had to considering issuing shares in 2013, 2017, and 2019.  Instead we got more and more buybacks each year...the exact opposite of what your suggesting here.


It's not just the 20% that matters.  It's where they are in the life cycle of the company, the opportunity set, the capital need, the valuation, the risks, etc.  All those are are relevant to one's decision to issue shares.  If you reread my comment, it was not a formulaic "If shares rise 20%, then issue shares."