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

[TheTalkingMule]

Algos love a cash raise

 

[dl003]

She's 760. My work here is done (time for brushing, not on the toilet though)

 

[30seconds]

on second thought, me thinks some of the institutional buyers like the move

actually yes. A raise of this magnitude allows large institutions to buy big chunks - $200m let’s say - at a set price and all at once.

 

[traxila]

Let's be honest, we can't say Elon telling the analysis who suggested raising cash to piss off brilliant and then calling this cash raise brilliant. People here need to pick one and stick to it.

Can’t speak for everyone. I know what I said. Didn’t know I represented the board.

 

[Mkorpal]

Hello green

 

[ev-enthusiast]

Some short term momentum traders might come on board.

 

[Krugerrand]

Exactly someone said: "Elon is Elon". Can't trust everything he says. That's what the bears been talking about. Now he just confirm it. Very disappointed. In one hand, "We don't need to raise cash", and then issue more shares.

Seriously?

Let me spell it out; Tesla changes direction faster than lightening strikes. Doesn’t matter what was said yesterday, if Tesla sees a new/better/quicker path, they take it. Tesla is ALWAYS looking for a new/better/faster path.

Something has changed. Now they want extra cash on hand. So be it. Drive on, Tesla.

If you’d be more comfortable with a slower paced company, pick any traditional OEM to invest in. Some are moving slow enough that it looks like they’re going backwards.

 

[KarenRei]

Aargh, and I didn't have a single buy go off.... :Þ

 

[InstiTes]

We were at 900 for what, a few hours?

Besides that, it’s bad form and opens you up to litigation to do an offering then issue what some may view as material information in the 10k (capex forecasts, sec subpoena).

 

[Right_Said_Fred]

Without this raise we would have been $20-30 lower for sure. The shallow FUD and macros were getting traction, but this blew it all out of the water

 

[mrdoubleb]

GF4 tree felling probably delayed by a week:

Tesla-Grundstück in Brandenburg: Gutachten zum Kaufpreis lässt auf sich warten - Berlin - Tagesspiegel

"Das Gutachten zum Grundstückswert des künftigen Tesla-Geländes in Grünheide bei Berlin kommt wohl erst kommende Woche. Das erklärte am Donnerstag Umweltminister Axel Vogel (Bündnis 90/Grüne) im Haushaltsausschuss des Landtags. Ursprünglich wollten die Parlamentarier über das unabhängige Gutachten beraten. Erst nach Unterzeichnung des Kaufvertrags am 16. Januar konnte ein vereidigter Gutachter beauftragt werden, berichtete Vogel. „Wir hätten uns gewünscht, dass das Gutachten früher vorliegt.“"
​

Translation:

The appraisal of the property value of the future Tesla site in Grünheide near Berlin will probably only come next week. That said on Thursday Environment Minister Axel Vogel (Alliance 90 / Greens) in the budget committee of the state parliament. The parliamentarians originally wanted to advise on the independent report. Only after the purchase contract was signed on January 16, a sworn expert could be commissioned, Vogel reported. "We would have liked the report to be available earlier."​

While this is a formality - I'd expect Tesla to pay EUR 50m too if that's the fair price - but Tesla owns the area only once they have paid the price, and there's a deadline when trees can be cut down, and if that is missed then GF4 would face a 6 months delay.

@avoigt may have the specifics on this, but I believe German law allows starting the tree harvesting even before the final sale is done and they are planning to do just that. Of course Tesla could risk having to reimburse if the deal falls through, but on the other hand they have to finish by early March due to the birds and the bees and all.

 

[FrankSG]

I'm baffled by the equity raise. Given all the information I have available to me, I don't see why they'd want to dilute for some extra cash. They've said they're spending cash as fast as they efficiently can, and their cash flows will be even stronger a few quarters from now after MY and Giga Shanghai are in full swing.

Elon and Zachary aren't stupid though, so there must be a good reason for the raise that is neither disclosed in the announcement, nor any of us are aware of at this moment. If I were to speculate, I'd say it must be for either an acquisition (company or Panasonic battery lines in Giga Nevada), or a new factory/production capacity most likely for battery cells.

Hopefully we'll find out more in April. If nothing happens in the next 12 months that makes it clear why they raised this $2B in equity, I'd be quite disappointed. I just don't see why they need extra money just to strengthen their balance sheet. Tesla used to sit on $2-3B just twelve months ago, which admittedly was on the low side, but $6B in cash with much more cash flow to come in the coming quarters, seems like plenty to me.

 

[KarenRei]

@GF4Tesla..️️.build #GigaBerlin. on Twitter

 

[Highway2Heel]

I picked up more in premarket at $728.80 and $726, respectively. No brainer.

 

[Kuhz]

Now the question is whether the SP will follow what happened the last few days. A surge in the first hour and then a decline.

 

[KarenRei]

I picked up more in premarket at $728.80 and $726, respectively. No brainer.

I do this sort of trading in options, and it just shot up way too fast this morning Found myself chasing a rocket up.

Now, if it goes higher, I could get to the point of re-selling previously bought-back options. But as things stand, it doesn't seem to want to do that either :Þ

 

[Bobfitz1]

Yep, the purpose is rather opaque:

"Tesla intends to use the net proceeds from the offering to further strengthen its balance sheet, as well as for general corporate purposes."​

But I suspect we will learn more at Battery Day at Giga New York ...

Has Tesla announced that Aprils "Company Talk" at GF2 Buffalo will also include topics they have been saying would be covered at Battery Day? Or is that just what people are assuming from a recent statement that Battery Day would be sometime in April?

Sorry if this has been covered and I missed the memo!

 

[Remus]

It's great that shorts are directly funding Tesla not just the share holders.

Elon learning some political correct answers to questions during ER would be a cherry on top

 

[keydiver]

Did anyone read about the subpoena from the SEC? I don’t want to give any of those articles any clicks....

Barron's:

On December 4, 2019....issued a subpoena seeking information concerning certain financial data and contracts including Tesla’s regular financing arrangements,” reads the company’s annual report, filed on a form 10k.

I think they are trying to tie it to Tesla's reduced set-aside for warranties perhaps, because later they say:

Warranties at Tesla have generated controversy in the past.The 2019 warranty expense was $555 million, up from $544 in 2018. The 2019 figure is about 1.7% of 2019 sales, down from 2.2% of sales in 2018. The decrease is noteworthy, but it is hard to know all the inputs that go into calculating a warranty expense. No car company provides enough transparency to assess it in detail.

I'm sure the shorts have sent dozens of complaints to the SEC about the warranty expenses, so this is almost to be expected by the Shortsellers Enrichment Commission.

 

[Highway2Heel]

Curious to see what 10:30 EST brings.