TSLA - Tesla Motors

[Grant]

The Tesla bull thesis seems to have shifted to robo-taxis. A common tactic of stock promoters is to promise the moon, so even if there's only a small likelihood of success some investors will think the risk-adjusted returns justify a long position.

 

While the probability of near-term success in level 4+ autonomy seems unlikely, Tesla's autonomy day did make me realize the company is taking this effort seriously. It's not just a way to promote the stock and raise cash selling FSD options.

[Grant]

As of December 31' data-ipsquote-timestamp=' 2018[/s'] March 31 2019 we were in material compliance with all financial debt covenants ...

[Castanza]

I don't understand how people justify wild claims like this? Tesla to 4000?

 

 

[DTEJD1997]

I don't understand how people justify wild claims like this? Tesla to 4000?

 

 

10% of her fund is in TSLA...what is she going to say?  I'm in TSLA because of the greater fool theory?  OR maybe there are so many TSLA fanboys, that she set up a fund to "rope them in"?  A marketing tool perhaps?  Perhaps she spouts insane nonsense simply to get in a segment on CNBC as she just did?

 

If this woman truly believes what she is saying I would suggest that she does not go to the marketplace, lest she be talked into trading her KASH for magic beans.

 

Further, I would also suggest looking closely at her portfolio, for if she is deluded about TSLA, what other turkeys does she have?  Taking the opposite position on her trades/holdings may be very lucrative indeed.

 

 

 

[Haasje]

I think it is marketing. I don't have a problem with outlandish targets. But; the fantasies to  get there, there are many other alternative stocks that are also very, very undervalued (with fewer risk) if you are this generous with your assumptions :)

 

It is also weird how the $4k price target doesn't change even after a horrendous quarter.

[Haasje]

And then to load up on a stock like this in an ETF structure... From one day to the next it can just get crushed on some awful news (like Elon getting fired or something) and every trader will see it when they want to get out of their top position and they will short it like crazy ahead of that. Could get really ugly one day.

[Grant]

Cathie Wood isn't just pumping; her ETFs have been buying this "dip". If Tesla can achieve level 4 autonomy next year, it really might be worth $4,000. Of course no one else believes it can do this. The market's days of believing Elon Musk seem long over.

[Haasje]

Even if we assume it should be worth $4000 if it achieves lvl4 next year (I'd say that also depends on what competitors do who are mostly ahead). At $4k it would be worth $800 billion (assuming no additional shares issued).

 

Even more incredible than achieving lvl 4 would be to achieve it while burning cash at core operations, not spending much of anything on R&D and being on the brink of bankruptcy all the while.

 

Even if I believed TSLA could achieve a feat like achieving that lvl4, the road to get there would still be immensely risky.

 

[Ahab]

I agree with you Haasje. It takes a high degree of credulousness to believe $4000 as a bull case and $800 as a bear case are reasonable targets for Tesla. This is a company that lost more money in the last quarter ($700 million, excl. one time items closer to $1 billion) than it has made in its entire existence. It has slashed its Capex to barebones levels and greatly reduced its R&D spend to contend with its dwindling cash balance (likely well below $2 billion at this point). Among other things that suggest a lack of cash, the Maxwell deal hasn't closed yet and a Solar City term loan keeps getting extended by several more months. The $4000 question is why Musk has refused/refuses to raise additional equity.  I suspect it's legal/regulatory barriers that are barring him from begging the Tesla faithful for more money.

I suspect this ends in a bang not a whimper. Tesla needs to raise highly dilutive financing in the next several months or it will go bankrupt by years end.

[SHDL]

Looks like they’re finally moving to raise capital.  Aiming for $2bn total, roughly 1/3 equity and 2/3 convertible bonds:

 

https://www.sec.gov/Archives/edgar/data/1318605/000119312519133824/0001193125-19-133824-index.htm

https://www.sec.gov/Archives/edgar/data/1318605/000119312519133837/0001193125-19-133837-index.htm

 

[fuzzhead1506]

I don't understand how people justify wild claims like this? Tesla to 4000?

 

 

10% of her fund is in TSLA...what is she going to say?  I'm in TSLA because of the greater fool theory?  OR maybe there are so many TSLA fanboys, that she set up a fund to "rope them in"?  A marketing tool perhaps?  Perhaps she spouts insane nonsense simply to get in a segment on CNBC as she just did?

 

If this woman truly believes what she is saying I would suggest that she does not go to the marketplace, lest she be talked into trading her KASH for magic beans.

 

Further, I would also suggest looking closely at her portfolio, for if she is deluded about TSLA, what other turkeys does she have?  Taking the opposite position on her trades/holdings may be very lucrative indeed.

 

I am certainly not trying to defend her $4k price target, but she sometimes talks about this price target as being 5ish years out.  I still think it is quite bullish nonetheless and she is indeed a character. 

 

 

Looks like they’re finally moving to raise capital.  Aiming for $2bn total, roughly 1/3 equity and 2/3 convertible bonds:

 

https://www.sec.gov/Archives/edgar/data/1318605/000119312519133824/0001193125-19-133824-index.htm

https://www.sec.gov/Archives/edgar/data/1318605/000119312519133837/0001193125-19-133837-index.htm

 

 

The portion from the convertible bonds is money available to the company. However, I am curious abou the language re: equity portion ... does it actually provide Tesla with cash? 

 

from Page 6:

 

We will not receive any proceeds from the sale of shares of our common stock by the selling stockholders.

 

Maybe a big someone is getting out of their position... ??  Of course it is entirely possible I misunderstood the filing, but my read on the situation is that Tesla perhaps offered this filing to make it sound like they were raising equity.

[spartansaver]

I don't understand how people justify wild claims like this? Tesla to 4000?

 

 

10% of her fund is in TSLA...what is she going to say?  I'm in TSLA because of the greater fool theory?  OR maybe there are so many TSLA fanboys, that she set up a fund to "rope them in"?  A marketing tool perhaps?  Perhaps she spouts insane nonsense simply to get in a segment on CNBC as she just did?

 

If this woman truly believes what she is saying I would suggest that she does not go to the marketplace, lest she be talked into trading her KASH for magic beans.

 

Further, I would also suggest looking closely at her portfolio, for if she is deluded about TSLA, what other turkeys does she have?  Taking the opposite position on her trades/holdings may be very lucrative indeed.

 

I am certainly not trying to defend her $4k price target, but she sometimes talks about this price target as being 5ish years out.  I still think it is quite bullish nonetheless and she is indeed a character. 

 

 

Looks like they’re finally moving to raise capital.  Aiming for $2bn total, roughly 1/3 equity and 2/3 convertible bonds:

 

https://www.sec.gov/Archives/edgar/data/1318605/000119312519133824/0001193125-19-133824-index.htm

https://www.sec.gov/Archives/edgar/data/1318605/000119312519133837/0001193125-19-133837-index.htm

 

 

The portion from the convertible bonds is money available to the company. However, I am curious abou the language re: equity portion ... does it actually provide Tesla with cash? 

 

from Page 6:

 

We will not receive any proceeds from the sale of shares of our common stock by the selling stockholders.

 

Maybe a big someone is getting out of their position... ??  Of course it is entirely possible I misunderstood the filing, but my read on the situation is that Tesla perhaps offered this filing to make it sound like they were raising equity.

 

It sounds to me like share count is increasing and TSLA is raising capital. Common shares post-raise is 176.4mn vs pre-raise of 173.7mn. A difference 2.7mn shares at a $239 share price equates to a cash raise of ~$640mn which the company is guiding towards post secondary offering (excludes convertible offering).

[stahleyp]

This speaks well for Ford :P

 

https://www.cnn.com/2019/05/06/tech/amazon-alexa-skills-blueprints/index.html

 

 

Works as a software developer for Ford...uses his extra money to buy a Tesla.

[Investmentacct]

This speaks well for Ford :P

 

https://www.cnn.com/2019/05/06/tech/amazon-alexa-skills-blueprints/index.html

 

 

Works as a software developer for Ford...uses his extra money to buy a Tesla.

 

I believe only car which can use his Alexa/Smart Car/IOT Skills is Tesla and Program something like this: "Alexa, preheat Tesla to 70F". "Summon out of Garage and keep it ready for drive".

 

Disclosure: State of Michigan bans sale of Tesla. People figures out which is better technology and productive use of time.

 

 

 

 

[Liberty]

CGP Grey on a Tesla road trip:

 

[A Dhandho Investor]

It sounds to me like share count is increasing and TSLA is raising capital. Common shares post-raise is 176.4mn vs pre-raise of 173.7mn. A difference 2.7mn shares at a $239 share price equates to a cash raise of ~$640mn which the company is guiding towards post secondary offering (excludes convertible offering).

 

The offering is indeed a combination of the convertible notes and share issuance. Someone on Twitter indicated that 50% of the shares were bought / offered to the Investment Banks involved in the issuance as they also provided Tesla with the hedge of the convertible (Tesla bought calls with a strike at 309 and sold calls with a strike at 607 to avoid dilution)

 

https://twitter.com/Trumpery45/status/1124811500680433664

 

There is also a good post about the transaction on this blog: https://empirefinancialresearch.com/articles/tesla-raises-2-4-billion-in-capital-is-tesla-desperate-taking-a-closer-look-at-the-deal

 

[alwaysdrawing]

It sounds to me like share count is increasing and TSLA is raising capital. Common shares post-raise is 176.4mn vs pre-raise of 173.7mn. A difference 2.7mn shares at a $239 share price equates to a cash raise of ~$640mn which the company is guiding towards post secondary offering (excludes convertible offering).

 

The offering is indeed a combination of the convertible notes and share issuance. Someone on Twitter indicated that 50% of the shares were bought / offered to the Investment Banks involved in the issuance as they also provided Tesla with the hedge of the convertible (Tesla bought calls with a strike at 309 and sold calls with a strike at 607 to avoid dilution)

 

https://twitter.com/Trumpery45/status/1124811500680433664

 

There is also a good post about the transaction on this blog: https://empirefinancialresearch.com/articles/tesla-raises-2-4-billion-in-capital-is-tesla-desperate-taking-a-closer-look-at-the-deal

 

 

That post is very helpful.  Shows the brilliance of the raise, to be honest.  Long term, I think this doesn't solve any of Tesla's problems, and I still think that the company is wildly over-valued, but the capital raise really kills the short term liquidity crisis possibility, and gives Tesla a couple quarters to keep going. 

 

The raise really hurts option holders, and the structure very smartly accommodated convert buyers hedging without pushing down the share price.

 

Can't say I expect Tesla to do well with their myriad problems and Elon's wildly improbable claims and predictions, but the short term short thesis is much weaker when Tesla has cash in the bank.  This has truly been an incredible story to follow.

[A Dhandho Investor]

It sounds to me like share count is increasing and TSLA is raising capital. Common shares post-raise is 176.4mn vs pre-raise of 173.7mn. A difference 2.7mn shares at a $239 share price equates to a cash raise of ~$640mn which the company is guiding towards post secondary offering (excludes convertible offering).

 

The offering is indeed a combination of the convertible notes and share issuance. Someone on Twitter indicated that 50% of the shares were bought / offered to the Investment Banks involved in the issuance as they also provided Tesla with the hedge of the convertible (Tesla bought calls with a strike at 309 and sold calls with a strike at 607 to avoid dilution)

 

https://twitter.com/Trumpery45/status/1124811500680433664

 

There is also a good post about the transaction on this blog: https://empirefinancialresearch.com/articles/tesla-raises-2-4-billion-in-capital-is-tesla-desperate-taking-a-closer-look-at-the-deal

 

 

That post is very helpful.  Shows the brilliance of the raise, to be honest.  Long term, I think this doesn't solve any of Tesla's problems, and I still think that the company is wildly over-valued, but the capital raise really kills the short term liquidity crisis possibility, and gives Tesla a couple quarters to keep going. 

 

The raise really hurts option holders, and the structure very smartly accommodated convert buyers hedging without pushing down the share price.

 

Can't say I expect Tesla to do well with their myriad problems and Elon's wildly improbable claims and predictions, but the short term short thesis is much weaker when Tesla has cash in the bank.  This has truly been an incredible story to follow.

 

Brilliance, yes and no. I think they should have raised 5b instead of 2,7b. The 2,7 will not even allow them a full year without further capital raises as this blog post also suggests: https://www.forbes.com/sites/jimcollins/2019/05/09/teslas-capital-raise-offered-no-real-benefit-to-the-company-or-its-suffering-shareholders/#1dad3fce222c

 

The raise is enough to cover debt obligations and the working capital deficit, but will not allow them to fund the capex Tesla had foreseen for 2019 (2,5b).

 

I also guess that a follow-up raise will be equity only and will be more ugly given Tesla's current position.

[DTEJD1997]

Hey all:

 

It appears that the lawsuit against Mr. Musk by the "pedo" cave diver is progressing.

 

This is not good...the only thing is how bad it will be for Mr. Musk, and will he do/say anything silly?

 

Could also blow up into a multi-million dollar judgement against Mr. Musk.

[ukvalueinvestment]

As far as I know, there is no evidence whatsoever the the guy is indeed anything other than a law abiding citizen that has been slandered by Musk.

 

Not settling this action just seems to show more hubris, arrogance, stubbornness, bad judgement, whatever.  ie, he's behaving like a child.

 

Is this a man you want managing people and company in an incredibly complex industry and situation?

[DTEJD1997]

hey all:

 

happy "top of the market" to you!

 

I just want to let everybody know that Cannabis stocks might be worth MOAR than TSLA!

 

An electronic mail came to me through the interwebs this afternoon informing me of this. 

 

If this isn't indicating a frothy market, I don't know what would!!!!

 

[rkbabang]

hey all:

 

happy "top of the market" to you!

 

I just want to let everybody know that Cannabis stocks might be worth MOAR than TSLA!

 

An electronic mail came to me through the interwebs this afternoon informing me of this. 

 

If this isn't indicating a frothy market, I don't know what would!!!!

 

People were saying things like this two years ago and it made just as much sense then as it does now. The thing about continuing calling a market top is that you will eventually be correct, who knows?

[DTEJD1997]

hey all:

 

happy "top of the market" to you!

 

I just want to let everybody know that Cannabis stocks might be worth MOAR than TSLA!

 

An electronic mail came to me through the interwebs this afternoon informing me of this. 

 

If this isn't indicating a frothy market, I don't know what would!!!!

 

People were saying things like this two years ago and it made just as much sense then as it does now. The thing about continuing calling a market top is that you will eventually be correct, who knows?

 

Maybe I run in the "wrong" or "slow" circles, but I've never seen cannabis mentioned with TSLA, or comparing the two.  Every time I see it, it has always been mentioned individually.

 

What would be EVEN MOAR BETTERER is if you could somehow combine TSLA, cannabis, and crypto-currency.  If you could do that, you would have all your bases covered and surely would get rich quickly? 

 

I think I'm going to talk to the customer service representatives on the corner of 8-Mile and Gratiot tonight!  I'm sure they know all about cannabis!  Could they also know of TSLA & cannabis?

[Saluki]

I always thought TSLA was overhyped, but after riding in one this past weeekend, I must say that they are head and shoulders better than any other car I've ridden in.  They've thought of everything (e.g. the sunroof gets darker automatically when it's brighter out).

 

My friend who owned the car told me that the base price for the car doesn't include self driving and that you have to pay a lot extra for (I believe he said it was $12k), which costs them nothing to add to the vehicle, just a software upgrade. It's a nice business model, but not nice enough to convince me to own the company.

 

When I price the stock out like any other car company, the price is still outrageous, but I can see why it's so hard to short.  People like my friend who love the car so much that they buy the stock and think the two are linked together like a double helix are stubbornly propping up the stock price and fighting against shorts with the passion of the converted. 

 

 

[Castanza]

I always thought TSLA was overhyped, but after riding in one this past weeekend, I must say that they are head and shoulders better than any other car I've ridden in.  They've thought of everything (e.g. the sunroof gets darker automatically when it's brighter out).

 

My friend who owned the car told me that the base price for the car doesn't include self driving and that you have to pay a lot extra for (I believe he said it was $12k), which costs them nothing to add to the vehicle, just a software upgrade. It's a nice business model, but not nice enough to convince me to own the company.

 

When I price the stock out like any other car company, the price is still outrageous, but I can see why it's so hard to short.  People like my friend who love the car so much that they buy the stock and think the two are linked together like a double helix are stubbornly propping up the stock price and fighting against shorts with the passion of the converted.

 

This just reinforces the idea that a good product or service does not always translate into a good sound company in which to invest.