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Tesla Motors Announces Offerings of Common Stock and Convertible Senior Notes

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Given so much of TSLA's price is banked on future potential, I can understand if the market thinks this gives Tesla's potential enough additional upside to offset the dilution.

I'm still not clear on what the offering actually means. What does it mean for "notes to be convertible into cash" and what art the "convertible note hedge transactions and warrant transactions"?

yeah, but I was under the distinct impression (at least in my own mind) that $30 to $90 move was not based primarily on that long view, but rather a clearing of a large short position. I somehow still believe that to be the case. Given valuation approaching 30% of GM I'm having trouble absorbing all of that rise into a base of long position. Still holding my current core shares, but wow- we have all pretty suddenly gone from 'the shorts are squeezing 300%' to ok if the shorts went away we'd have buyers at this price. Just not there yet I guess
 
It could put TSLA in play for a buyout, under the loan program Tesla could not be sold, it will now have that as an option. Perhaps there's a lot more to this than meets the eye :)

It also gets rid of a debt they would have to reserve cash to pay, allowing them to not worry about it, in the event of a slowdown/downturn in the global economy.

Unfortunately it also means Elon Musk can leave Tesla (one of the terms of the loan was that he couldn't, if I remember correctly). However, the fact that he is investing so much of his own money in the company is probably a good indication that he isn't planning on going anywhere for a while. And I think Tesla still offers many years of really exciting developments. It's nowhere near yet where he wants Tesla to be, and I don't think he will leave before Tesla gets there.
 
while details not layed out (not that I'd understand them) how awesome that there is some kind of hedging mechanism designed to offset at least part of shareholder dilution

In connection with the offering of the notes, Tesla intends to enter into convertible note hedge transactions and warrant transactions which are generally expected to prevent dilution up to 100% over the offering stock price. In connection with establishing their initial hedge of the convertible note hedge and warrant transactions, the hedge counterparties or their affiliates expect to enter into various derivative transactions with respect to our common stock concurrently with or shortly after the pricing of the notes, including with certain investors in the notes.
 
Unfortunately it also means Elon Musk can leave Tesla (one of the terms of the loan was that he couldn't, if I remember correctly). However, the fact that he is investing so much of his own money in the company is probably a good indication that he isn't planning on going anywhere for a while. And I think Tesla still offers many years of really exciting developments. It's nowhere near yet where he wants Tesla to be, and I don't think he will leave before Tesla gets there.

Right, Elon needs to get TSLAs valuation up to $50B for all of his stock options and bonuses to fully vest, at which point he might have enough money to personally fund the mission to Mars, he so much wants to be a part of :)
 
Other thoughts/advantages:
Makes it easier for ultra conservatives to change laws (NC, Texas, etc) making life difficult for Tesla to do business in their state.

Takes away one of the few negatives people are still making. While any PR is good to get name recognition, TESLA is getting better and better known. So taking the air out of negative Nellie's still out there is big. Especially since all of Tesla Sales are basically word of mouth sales.
Or in short, Tesla wants Rush Limbaugh and Fox viewers as customers too:)

No more interest or principal payments making it easier to reach profitability as ZEV credits dry up.

I personally think this is bigger than any one of the other announcements so far.

Oh, and isn't it fun to think we have JP and the people shorting the stock to thank, in part, for this?

Yes.

Though financing and service announcements look better every day. These are all extremely solid developments.
 
This is good news. I'm not sure why it had to be done now except that it clears up finances for the future. Tesla gets the Feds off their back and the Feds won't be getting a cut of the Tesla action due to the early buyout. I'm not sure if everyone is aware but their was a clause in the loan that the Feds could buy a lot of Tesla stock (2 million shares - If I remember correctly) if Tesla hasn't paid the loan off in 5 years. That was the reason for Tesla to make the big push for the five year payoff. Elon must see an advantage for an even earlier payoff.

Maybe this has something to do with the NADA fight.
 
My way of looking at this is that Tesla is using money from the Shorters to pay back the DOE loans early!

Since the shorters typically complained about government assistance, it's great that Elon made them put their money where their mouths were and get those loans repaid more quickly, for a net benefit to the US Taxpayer since they earned interest.

Just about the sweetest revenge you can imagine. ;^)
 
It had to be done now because of the short squeeze. By doing this now they are basically paying off the DOE loan with money from the short sellers that just got blown out. If they waited too long, someone else would have captured those profits and the squeeze would have done Tesla no good.
 
It had to be done now because of the short squeeze. By doing this now they are basically paying off the DOE loan with money from the short sellers that just got blown out. If they waited too long, someone else would have captured those profits and the squeeze would have done Tesla no good.

That is awesome... if you're a long and have held every share through this craziness, you have benefitted... the company we're invested in is better for their use of the squeeze.
 
My way of looking at this is that Tesla is using money from the Shorters to pay back the DOE loans early!

Since the shorters typically complained about government assistance, it's great that Elon made them put their money where their mouths were and get those loans repaid more quickly, for a net benefit to the US Taxpayer since they earned interest.

Just about the sweetest revenge you can imagine. ;^)

Agreed. Expert play by Elon.
 
My way of looking at this is that Tesla is using money from the Shorters to pay back the DOE loans early!

Since the shorters typically complained about government assistance, it's great that Elon made them put their money where their mouths were and get those loans repaid more quickly, for a net benefit to the US Taxpayer since they earned interest.

Just about the sweetest revenge you can imagine. ;^)

+1

I had the exact same thought. The shorts, ironically, created a situation that enhanced the stability and longevity of the company. In fact, I bet more than a few of the buyers of the secondary will be existing shorts covering positions, in effect, directly paying off the DOE loan that was probably a key component of their short investment thesis!
 
Wild blue-sky prediction: eliminating the loan payment now will indeed help the Q2 earnings report, and in the coming days/weeks we will see several more financial analysts upping their share price and earnings estimates. Hopefully they're at work revising their numbers as I type this. :)