Tesla shares essentially traced the Nasdaq Composite today, which is often the case on days without significant Tesla news. Announcement of a favorable financing deal could kick the stock nicely upward.
I have a question. It seems to me from reading on this board that the capital raise is potentially the single most important factor in the near term, at least until we get delivery numbers for Q2 in early July.
Obviously, Tesla needs a large amount of money on the order of several billions to fund the Model 3. Here are the possibililties I see:
1. Elon chooses to do a capital raise now. The share price is roughly 207-208 ish which is lower than the 242 SP on the last capital raise. This would represent a "down round" which would dilute shareholder value. As far as I know, Elon has never done this before in any of his companies. Do you see this as a possibility? Why didn't Elon raise before the Q1 CC when the stock price was approaching $270? Do you think he thought that the share price would increase after the revelation of a goal of 500K cars in 2018. Or does he have another plan?
2. Elon chooses to wait till after Q2 delivery numbers which, if good, could elevate stock price. Do you think this is a possibililty or is it too risky given that macro situation could crash and share price could actually drop further.
3. Elon sells a minor stake in the company to a big player (e.g GOOG). Is this a possibility? Elon is of course good friends with Sergei and Larry. Tesla's CFO is from GOOG. A minor investment in Tesla would allow Elon to keep control and allow GOOG to put their money to a good use with potential for high reward. As you know, Larry Page once said he should give all his money to Elon when he dies. A 3 billion investment is a small amount of money for GOOG but would turn this ship around in no time. Most importantly, it would provide TSLA with an extremely powerful ally which, in my opinion, may be necessary to combat large interests such as oil, car dealers, car makers, etc. I believe this would also send a signal to the shorts that Tesla will survive and fluorish and most will cover immediately leading to short squeeze.
Related question: If a large company takes a minor stake in Tesla, does this have to occur at the current share price or could they do it at a higher price (say 250 or 300) and avoid a down round of financing. Obviously, when companies completely buy out other companies, the acquisition price is typically higher than the share price. Does this also apply for minority stakes? Of course, the price will go much higher just on announcement of such a partnership.
I thank you in advance for your insight.