Dear Elon.
I think you must read these forums from time to time, so I thought I would drop you a line.
As I had posted on this forum, your recently announced earnings beat was quite obvious months ago to someone who was willing to study the situation.
On the conference call you said you hadn't thought about doing a capital raise. However your share price is now up 40% or more from the closing price on the day of the earnings report.
It's high unlikely that the marginal buyers here are long-time Tesla supporters, as most of us knew about the earnings beat nearly $40 ago. Much of the increase is from short sellers who made the foolish mistake of betting against you. They are now in a very difficult situation and due to the high cost of shorting they have no choice but to cover. The ongoing charges for borrowing shares are killing them.
Although I have no doubt Tesla shares will be worth quite a bit more years from now, the possibility of an economic hiccup in the time between is real. With the current share price, you could really do shareholders a service by raising capital via selling a small number of shares, perhaps 8 million? At current price this would allow you to raise over $500 million.
This $500 million would allow you to accelerate development programs and perhaps pay down the DOE loan. It would virtually guarantee the survival of Tesla for the decade to come, an incredibly valuable proposition for a shareholder.
There's a secondary beneficial impact of doing a capital raise: increased liquidity. Right now there are only about 60 million shares of Tesla that are available for investors. The rest are held by yourself, Fidelity, Daimler, Panasonic, and Toyota. Increasing the number of stakeholders will increase your chances of being included in the S&P 500 index and increase the number of Tesla supporters. Both of these are beneficial outcomes for existing shareholders.
I understand how shareholder friendly you are. I know you don't want dilute our holdings needlessly. However this is a wonderful opportunity you are being presented to get out of the government loan shadow and really protect the shareholders with a very small amount of dilution. In the future when the share price might be lower and/or Tesla has substantial cash flow you could consider doing a buyback to reduce the outstanding share count.
As the short position dwindles, the price will return to normal supply/demand dynamics and the current opportunity may be gone.
Thank you for doing all you have done.
Luv
I think you must read these forums from time to time, so I thought I would drop you a line.
As I had posted on this forum, your recently announced earnings beat was quite obvious months ago to someone who was willing to study the situation.
On the conference call you said you hadn't thought about doing a capital raise. However your share price is now up 40% or more from the closing price on the day of the earnings report.
It's high unlikely that the marginal buyers here are long-time Tesla supporters, as most of us knew about the earnings beat nearly $40 ago. Much of the increase is from short sellers who made the foolish mistake of betting against you. They are now in a very difficult situation and due to the high cost of shorting they have no choice but to cover. The ongoing charges for borrowing shares are killing them.
Although I have no doubt Tesla shares will be worth quite a bit more years from now, the possibility of an economic hiccup in the time between is real. With the current share price, you could really do shareholders a service by raising capital via selling a small number of shares, perhaps 8 million? At current price this would allow you to raise over $500 million.
This $500 million would allow you to accelerate development programs and perhaps pay down the DOE loan. It would virtually guarantee the survival of Tesla for the decade to come, an incredibly valuable proposition for a shareholder.
There's a secondary beneficial impact of doing a capital raise: increased liquidity. Right now there are only about 60 million shares of Tesla that are available for investors. The rest are held by yourself, Fidelity, Daimler, Panasonic, and Toyota. Increasing the number of stakeholders will increase your chances of being included in the S&P 500 index and increase the number of Tesla supporters. Both of these are beneficial outcomes for existing shareholders.
I understand how shareholder friendly you are. I know you don't want dilute our holdings needlessly. However this is a wonderful opportunity you are being presented to get out of the government loan shadow and really protect the shareholders with a very small amount of dilution. In the future when the share price might be lower and/or Tesla has substantial cash flow you could consider doing a buyback to reduce the outstanding share count.
As the short position dwindles, the price will return to normal supply/demand dynamics and the current opportunity may be gone.
Thank you for doing all you have done.
Luv
