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Causalien
Prime 8 ball Oracle
Thing about PE valuation ratios and PE always reverting to historic averages. There are two ways it could happen and it's not an absolute. When most people see a high PE, they've been trained to think that the P have to drop.
But mathematically (i.e. the truth) Either the E will grow or the P will drop.
So for the traditional Car manufacturers, they have a very simple way of reaching TSLA type PE. They can drop their E while keeping their P intact by using government money to buy back stock.
*edit: I am more curious about the two recent development with regards to the conflictof interest at G$ and whether or not anyone at Theranos will go to jail. If nothing is done, it is a signal that we are back to full capitalism mode.
Others will see that enforcement of tules is not happening and start going wild as well. When this happens a crash will come within 1 or 2 years.
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The Blue Owl
Endangerous Herbivore
Not to mention that PE is a stupid metric for evaluating companies that are still operating in aggressive growth mode. If a company breaks even, the PE is infinite! That says nothing about the tale that company will tell in the future.
I am building a list of #TSLAShorters on twitter.
@S_Padival/#TSLAShorts on Twitter
Hoping to see a compelling bear case. Nothing exciting in tweets so far.. just moaning and gnashing of teeth.
@S_Padival/#TSLAShorts on Twitter
Hoping to see a compelling bear case. Nothing exciting in tweets so far.. just moaning and gnashing of teeth.
This is really OT, so I apologize...
I should have clarified more. You're right if you assume he's going to sell the shares. I'm assuming he never sells so it doesn't really matter -- all shares are therefore truly fungible -- since they will all get stepped up basis upon his death (or donated to charity at death or before). The bigger point I was trying to make was to illustrate how he really is paying his fair share taxes in the current transaction because of the option exercise.
ev-enthusiast
Active Member
ev-enthusiast
Active Member
That's the main reason for the list. I used to follow him. Now the list allows me to unfollow him and just skim through all the tweets together once in a while.
Moderator Note #1:
Cut it out. All of you know who you are, and you know what.
Moderator Note #2:
I find it curious and unfortunate that a thread dedicated to and populated by investors has shown, in the past twelve hours' posts, a tedious repetition of misunderstanding and calls for clarification of what has occurred wrt this capital raise. Folks: THIS IS IMPORTANT STUFF! If you're going to be active on this board it is not necessary always to read every post <unless you're a mod....grrrr....> BUT - when an event like this occurs what on earth are you doing with your time if not scouring the other recent posts to learn the not-always straightforward ins and outs....BEFORE you post?????? There have been some excellent discussions, explanations and analyses of this action by Tesla in the past several pages and it really, really has not been necessary to raise the same questions, delve down the wrong paths, come up with garbled half-interpretations when the hard work already has been done with admirable clarity minutes or a few hours before.
Non-moderator Note #3:
With respect to the question as to why Tesla is raising only $1.4bn or so at present - I have two possible answers.
1. The first is that Some Money now can be better than More Money later, even if it doesn't forestall that more later still will be necessary. It will be the case that the second, later tranche will be cheaper (ie, less dilutive, for a given definition of dilution)....IF this hereupon strengthened balance sheet combines with other, both market and non-market factors to raise the stock price.
2. The second is that yesterday's announcement could be an interesting one-player activity. Let's suppose some Deep Pocket <WarrenB...GeorgeS....AudubonB...> takes an interest in, say, a $1.4bn position in TSLA. It is effectively impossible to obtain such an amount in the open market, given the common stock distribution. So Mr. DP goes to GS (now you know it's not me, as I've said time and again I nevermore will deal with Pumpman Sachs) and strikes the kind of deal we've seen. All straightforward...except that, even more than during normal secondaries, the rest of the market players get left out (as in: "Oh, Fidelity? Thank you for your request for 366,000 additional shares. We have been able to allocate you 200. You're welcome!").
Now, I don't give high credence to #2 - but it could occur. I still am scratching my head as to why we're seeing in this tranche a straightforward equity offering rather than a convertible preferred, however, so - perhaps - this is one logical answer: because for whatever reason one single large player needed/wanted straight equity rather than a debenture.
Carry on. Equably, now....
Cut it out. All of you know who you are, and you know what.
Moderator Note #2:
I find it curious and unfortunate that a thread dedicated to and populated by investors has shown, in the past twelve hours' posts, a tedious repetition of misunderstanding and calls for clarification of what has occurred wrt this capital raise. Folks: THIS IS IMPORTANT STUFF! If you're going to be active on this board it is not necessary always to read every post <unless you're a mod....grrrr....> BUT - when an event like this occurs what on earth are you doing with your time if not scouring the other recent posts to learn the not-always straightforward ins and outs....BEFORE you post?????? There have been some excellent discussions, explanations and analyses of this action by Tesla in the past several pages and it really, really has not been necessary to raise the same questions, delve down the wrong paths, come up with garbled half-interpretations when the hard work already has been done with admirable clarity minutes or a few hours before.
Non-moderator Note #3:
With respect to the question as to why Tesla is raising only $1.4bn or so at present - I have two possible answers.
1. The first is that Some Money now can be better than More Money later, even if it doesn't forestall that more later still will be necessary. It will be the case that the second, later tranche will be cheaper (ie, less dilutive, for a given definition of dilution)....IF this hereupon strengthened balance sheet combines with other, both market and non-market factors to raise the stock price.
2. The second is that yesterday's announcement could be an interesting one-player activity. Let's suppose some Deep Pocket <WarrenB...GeorgeS....AudubonB...> takes an interest in, say, a $1.4bn position in TSLA. It is effectively impossible to obtain such an amount in the open market, given the common stock distribution. So Mr. DP goes to GS (now you know it's not me, as I've said time and again I nevermore will deal with Pumpman Sachs) and strikes the kind of deal we've seen. All straightforward...except that, even more than during normal secondaries, the rest of the market players get left out (as in: "Oh, Fidelity? Thank you for your request for 366,000 additional shares. We have been able to allocate you 200. You're welcome!").
Now, I don't give high credence to #2 - but it could occur. I still am scratching my head as to why we're seeing in this tranche a straightforward equity offering rather than a convertible preferred, however, so - perhaps - this is one logical answer: because for whatever reason one single large player needed/wanted straight equity rather than a debenture.
Carry on. Equably, now....
Johan
Ex got M3 in the divorce, waiting for EU Model Y!
Your option nr. 2. makes a compelling case. I would argue that an important and more obvious reason for the capital raise coming in the form of a straight stock offering is, as others (shout out to @eskm8w), to create the opportunity for Elon to exercise his options thus converting them to shares, while at the same time selling (and donating) part of his holdings to cover the taxes he now owes. His sale of stock is "baked in" with the secondary offering so as not to make this transaction on the open market, which would create strong sell pressure on the stock. In other words, those buying the secondary now are buying shares from a pool of shares consisting of both the newly issued ones mixed with some of the ones Elon is selling. For the buyer it doesn't really matter if they are buying shares from Elon or the newly issued ones - a share is a share and the price is locked in.
It irks med that we still haven't seen what the actual exact price of the offering is, but the action today would suggest that the price on the open market will calibrate toward that price point.
The offering agents (GS & others) call potential buyers all the time on companies like Tesla to judge the level of interest to buy stock in conjunction of new raises. This feedback is used to understand the depth / appetite of the market at various offering prices & sizes.
From there you pick an amount you want to raise & a price band you want to raise it in.
Short way of saying - $2B is probably good estimate of what they could raise at the current price without substantial downward pressure.
From there you pick an amount you want to raise & a price band you want to raise it in.
Short way of saying - $2B is probably good estimate of what they could raise at the current price without substantial downward pressure.
Johan
Ex got M3 in the divorce, waiting for EU Model Y!
I believe you my good man. Wipe that egg off.
I am one of those who has been guilty of to much banter and confrontation in this thread in the last week. I've become an avid user of the Ignore feature and it works really well, although some pages contain 13 posts instead of 20
Seba is an opportunist who tells people what they want to hear. Companies like Bloomberg New Energy Finance and Green Tech Media are research companies run by adults providing evidence based predictions to adults.
Fresh off the press - another media review of Model X
We Took the Tesla Model X for a Test Drive
An interesting bit for investors:
"the Palo Alto company is now delivering the seven-seater in solid numbers, suggesting that it was time to give the luxury family vehicle a road test."
We Took the Tesla Model X for a Test Drive
An interesting bit for investors:
"the Palo Alto company is now delivering the seven-seater in solid numbers, suggesting that it was time to give the luxury family vehicle a road test."
But what about Murphy's First Law, the law of analysis: the right answer divided by the wrong answer, and that multiplied by the wrong answer, gives, the right answer! Voila! (1950s lore at MIT.) I was really experienced with the law of experimentation, destroyed the apparatus for my bachelor's thesis in my first use of an arc welder. Fortunately, the lab machinists fixed it easily.
And the soothsayer award of the day goes to ...
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