If Musk really does want to raise capital before 1Q ER, then April 2016 might unfold like this:
STEP 1 Unveil Part 1 (done)
Message for potential customers = VALUE
Reservers are early adopter types.
Cumulative reservation total increasing
IMHO, it will be a strong indication of a raise before 1Q ER.
Cumulative reservation total is rising during STEP 1 to N, say, at the moment of...
STEP 2 Unveil Part 2
Message for potential customers = SUPER NEXT LEVEL (Musk's term)...
Reservers will again be early adopter types.
Cumulative reservation total increases during this step by a factor of 3 *, to 3xN, whereupon...
STEP 3 Announce cut-off date for M3 reservations
Message for potential customers:
Sorry, we need to limit M3 production and then plan our expansion so we will have capacity in reserve to launch new products, pick ups, vans etc. Other automakers may also be planning compelling mid-price sedan EVs, but
if you really think you will want an M3 please order before the cut-off date (April 30... end of month perhaps?).
Reservers during STEP 3 will be
mainstream types ( who notice no chance of getting anything this good from other automakers)
Cumulative reservation total increases even more rapidly than in STEPS 1 & 2, while...
STEP 3.5: Official Gigafactory Opening Event takes place.
Message for Investors: Execution is good.
GF Module 1 is already producing Battery Packs on spec much more cost efficiently than Fremont.
Hint of reasonable to good margins on Tesla Energy Products.
Cumulative reservation total increases during STEP 3 by a factor of 5
** at cut off, to
15xN, whereupon...
STEP 4 may be initiated around the cut-off date, possibly a little earlier to get it settled before 1Q ER:
Raise equity capital (comparable to sum of deposits, perhaps) at highest supported SP *** (lowest dilution)
STEP 5: (in May)
Q1 ER: Tesla explains how it can accelerate construction of GFs and create M3 production lines in Fremont and elsewhere. The company's forward looking statements will not be treated with skepticism because it will be already sitting on a mountain of new equity capital and a 0% loan facility (customer deposits) sufficient to spur much faster growth.
"Super next level"...these are Musk's words. I give him the benefit of the doubt and assume that whatever features will be unveiled they will be so compelling that another N early adopters are sucked into the reservation line. Also, because word of M3 is still diffusing through media and by word of mouth to populations that have never heard of Tesla, I have credited another N early adopter reservations simply due to
the time effect of the ever growing Tesla awareness during STEP 2. That brings us to 3xN.
** In any population adopting something new, the mainstream cohort will be
much more numerous than the early adopter cohort
. Active posters to this forum are mainly of the early adopter type, who may not fully appreciate that
an incentive is needed to get mainstream types to reserve (otherwise they would
also be called early adopters). Fear of missing out on a perceived 'can't afford to be without' type of product may be the perfect incentive. And because the mainstream cohort is so numerous, my multiple for their contributions to reservations numbers is 5, so bringing the cumulative total to 15xN at the cut off date.
*** Impossible to guess even, but $TSLA may spike at ridiculous levels and then fall back to a new support level very much higher than all current price targets. Some positive factors to consider:
Shorts covering
Some capital fleeing major automakers may land on Tesla.
Analysts will probably try to completely remodel Tesla (after GF opening) boosting price targets to match their new models.
New reservers taking a position in TSLA. (Average of only 1 share per reserver, say, could amount to 7.5m**** shares).
Suppose N is about 500k (not too far-fetched with todays information, I hope most of you will now be in agreement on this).
Then if my multiples of N are reasonable (Many TMC members may have difficulty here because they are almost certainly in the early adopter cohort, not recognising perhaps that mainstream types need an incentive to act), it follows that we could have 15xN = 7.5m reservations by the cut off.
[If Musk will announce Unveil Part 2 in the next few days, the remaining steps are likely, IMO...
Which brings me to my WAG of 10m reservations by the cut off. I'm optimistic. Absolute max is probably ~ 20m, thereby sucking many years' worth of mid-price sedans off the forward sales assumptions of all of the major automakers. Either way, April will be interesting]
