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Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

dw4ngg

Member
Feb 19, 2017
610
2,129
Houston
Here's the prospectus, which got filed with the SEC:

424B5

"Common stock we are offering

2,650,000 (or 3,047,500 shares if the underwriters exercise their option to purchase additional shares in full)."

"We expect to receive net proceeds from this offering of approximately $2.01 billion (or approximately $2.31 billion if the underwriters exercise their option to purchase additional shares in full) after deducting the underwriting discounts and our estimated offering expenses. The estimated net proceeds are based on the assumed public offering price of $767.29 per share, which was the last reported sale price of our common stock on February 12, 2020."​

Does anyone know how the final offering price is determined?
I thought you knew everything ....:eek:
 

mongo

Well-Known Member
May 3, 2017
12,966
38,501
Michigan
It's always at the closing SP from the previous day:

"public offering price of $767.29 per share"​

0001193125-20-034289 | 424B5 | Tesla, Inc.
But they don't fix it at that price, which leads to uncertainty:

We expect to receive net proceeds from this offering of approximately $2.01 billion (or approximately $2.31 billion if the underwriters exercise their option to purchase additional shares infull) after deducting the underwriting discounts and our estimated offering expenses. The estimated net proceeds are based on the assumed public offering price of $767.29 per share, which was the last reported sale price of our common stock on February 12,2020. We intend to use the net proceeds from this offering to further strengthen our balance sheet, as well as for general corporate purposes. See “Use of Proceeds.” Each $1.00 increase or decrease in the assumed public offering price of $767.29 per share would increase or decrease, as applicable, our cash and cash equivalents, working capital, total assets and total stockholders’ equity by approximately $2.6million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus supplement, remainsthe same and after deducting the estimated underwriting discounts and our estimated offering expenses.
 

jerry33

(S85-3/2/13 traded in) X LR: F2611##-3/27/20
Mar 8, 2012
19,632
22,281
Texas
That's true on your first point. Tesla could get loan from US government for GF Texas, since Trump says he will support Elon if he grows employment in the US.
Getting Federal loans means the shorts will scream bailout. Not a good idea unless you really, really need it. State government loans are different.
 

aubreymcfato

Supporting Member
Sep 16, 2016
1,120
8,566
Italy
Yeah, but it's a very different financing situation though:
  • Google is juggling bits into different configurations using computer programs, which is near infinitely scalable, at very little capital cost.
  • Tesla is juggling atoms into different configurations using machines and manual work, which is very hard to scale and comes at very high capital costs.
Also, Google is employing white collar nerds, which is a finite supply that is being bid up in Silicon Valley.

Tesla is employing blue collar workers at Fremont, and stock compensation in the auto industry is unusual.

For example it's so unusual that in 2017 the newly acquired Tesla Grohmann employees in Germany near revolted over the new stock options plan, and insisted on a cash bonus. Elon visited them and they got their wish in the end - but in hindsight it was a shortsighted decision.

Tesla's Palo Alto software positions on the other side of the Bay are paying lower than Apple/Google but are still competitive with many other SV companies, especially after a 400% rally of the stock. I'm sure Andrej Karpathy and most of his group are sleeping well these days. :D

I remembered well that Vicky was fired, but she's the only Tesla (ex)employee I know on Twitter, so I asked her.
It seems to me that owning stock bonus as a blue collar worker is a big advantage for Tesla workers - or at least it has been for years. It may be a major incentive for skilled workers to apply for Tesla.
 

sundaymorning

Active Member
Jul 26, 2013
3,464
18,270
Orange County
Back in 2013 when shares shot up from $30 to $92 Tesla used that opportunity to raise some capital between $90-92. Elon also bought some shares at those prices, the stock eventually stabilized between $88-92 through some trading days/weeks before breaking out again. I think selling stock at current prices will likely help stabilize the SP in the $700 range.
 

InstiTes

Member
Apr 13, 2019
20
786
East Coast
Here's the prospectus, which got filed with the SEC:

424B5

"Common stock we are offering

2,650,000 (or 3,047,500 shares if the underwriters exercise their option to purchase additional shares in full)."

"We expect to receive net proceeds from this offering of approximately $2.01 billion (or approximately $2.31 billion if the underwriters exercise their option to purchase additional shares in full) after deducting the underwriting discounts and our estimated offering expenses. The estimated net proceeds are based on the assumed public offering price of $767.29 per share, which was the last reported sale price of our common stock on February 12, 2020."​

Does anyone know how the final offering price is determined?

The price will be set at the end of the day (evening time EST) depending on where the stock closes. So it is largely dependent on trading today. Before you ask, yes that leaves it open to hedge funds shorting the stock in order to buy it back participating in the offering, which is a common move. If the stock declines enough, the company can pull the offering which would force these funds to cover. Also if there is enough real long demand, then the company will place it with them which will also force these guys to cover in the open market tomorrow.

But to answer your question, it will come at a very slight discount (~50bps) to wherever it closes today.
 

jerry33

(S85-3/2/13 traded in) X LR: F2611##-3/27/20
Mar 8, 2012
19,632
22,281
Texas
Why would the stock fall after an offering is announced? If anything, the balance sheet just got strengthened. Although it is a bit strange that just 2 weeks ago they said they had no need for more cash, but this price action still makes no sense....
Need is not the same as want. They don't need more cash, but they want it. My hunch is that they really want GF5 for the Cybertruck up and running as soon as possible.
 

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