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

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Why did Tesla decide to raise capital? Because they thought it was a good decision to. Thus the company should be worth more than it was before the raise. It could however indicate that things were not so well as we thought before the raise, but it could also indicate that things were better than we though, we don’t know.

What will they use it for? We don’t know, but here are some plausible ideas:

1. Secure the company. Be prepared if Covid-19 kills FCF the coming quarters or for some other reason the company has a difficult time
2. Use cash to acquire some company or part of a company, for example Panasonic GF1 cell production, some Semi truck manufacturer, some Lithium miner, some taxi/ride sharing company
3. Build another battery gigafactory with own cell production
4. Build more car factories for Semi, Cybertruck, Model 2 or more 3/Y in China/Asia/Europe
5. New product line for example bicycle, Escooter, boat, EVTOL
6. Some combination of above

Another (admittedly out there, but hey) possibility:

7. Fund the replacement of thousands of battery packs should the Batterygate court judge rule that Tesla owes each of the affected owners a new battery.
 
someone once said Elon doesn’t stutter around beautiful women. Fascinating trait haha

but in more important news, I love even numbers! 804!!

To be clear about Elon, I don’t believe he has a classic stutter. It’s just that he’s constantly interrupting himself and thinking five sentences ahead of what he’s uttering. Maybe Elon is just like other guys where our brains shut off when talking to a beautiful woman, which allows Elon to then talk normally :)
 
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The best thing he talked about today is when he talks about how much the other auto companies wish they could raise money like Tesla. Tesla is raising cash just to secure its foreseeable future, while Ford who wants to and needs to invest in batteries, and new production methods does not have this luxury. For those that understand what is going on it’s clear Tesla is playing from way ahead.
Tesla has a future. Ford, GM, etc not so much.
 
Great! Here's the 2020 outlook/guidance:

Management Opportunities, Challenges and Risks and 2020 Outlook

Automotive—Production

A key focus in 2020 will be our efforts towards establishing and expanding capacity for vehicle production at volume across three continents. At the Fremont Factory, we commenced Model Y production earlier than anticipated, and combined with Model 3, we have installed annual production capacity for 400,000 vehicles. We expect to further increase this capacity to 500,000 vehicles through the installation of additional equipment.

At Gigafactory Shanghai, we have installed annual production capacity for 150,000 Model 3 vehicles that we believe we will eventually be able to push to actual rates of production in excess of such number, subject to local production of battery packs, which we began ramping there later than other processes.

We have commenced construction of the next phase of Gigafactory Shanghai to add Model Y manufacturing capacity at least equivalent to that for Model 3.​

In the update letter they also listed 90k/year Model S/X production capacity.

So they want to raise Fremont production alone to 500k/year, GF3 to 150k with an option for more, plus Model Y capacity with at least that much capacity.

I.e., if I'm adding these up correctly, 500k+90k+150k+150k "and more" = 890k/year "and more", in 2020. :D
Production capacity at end of year 2020, in case someone was reading this too quickly.
 
There's simply no downside to this move, and personally I'd like to seen it a bit bigger. Elon was likely very hesitant to give any more business to Goldman or MS, but the Board(or whoever) probably convinced him it would be funny to see these bondholder shorts scramble to cover.

Only TSLA can dilute by 1.5% and make the float tighter!
 
SEC Urged to Seek More Disclosure When Investors Tout Short Bets

A group of law professors is asking the U.S. Securities and Exchange Commission to require that traders who publicize their intent to drive down a company’s share price be more transparent when backing off those bets to avoid market losses.

The request that the SEC seek more disclosure by short sellers, sent to the agency on Wednesday, cited an increase in so-called negative activism, in which traders sometimes use fake names to disseminate adverse views of a company.

“The commission should vigilantly ensure that short position disclosure, when voluntarily initiated by a short seller, remains truthful and accurate,” the professors said in a petition lead written by Columbia University professors John C. Coffee and Joshua Mitts. “When a short seller has chosen to disclose a short position, failure to disclose that the position has been closed is doubly misleading,” they wrote, noting that they’re not advocating mandatory reporting of all shorts.

...

The SEC rarely passes rules based on outside petitions, but such letters can serve as the basis for policy discussions that lead to changes. The professors’ request is notable because it calls for action in the thorny area of regulating short-sellers, a frequent nemesis of corporate executives such as Tesla Inc.’s Elon Musk.
 
From the filing:



So they have an assumed price, that can change. But the number of shares have been "fixed."
Disagree (edit: lightly), from the very next lines in the filing:

Each 100,000 increase or decrease in the number of shares offered by us, asset forth on the cover page of this prospectus supplement, would increase or decrease, as applicable, our cash and cash equivalents, working capital, total assets and stockholders’ equity by approximately $75.9 million, assuming that the assumed public offering price of $767.29 per share remains the same and after deducting the estimated underwriting discounts and our estimated offering expenses.The information discussed above is illustrative only and will adjust based on the actual public offering price, the actual number of shares that we offer in this common stock offering, and other terms of this common stock offering determined at pricing.
 
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So this $2.01B in common stock offering, who gets first (or all?) dibs exactly? How does it work, or does that vary on a deal by deal basis of each offering?

Also, is it a good thing that the SP the day of the offering went above the offer SP (are these extra shares available only today, and then the options they announced for 30 days?)?
 
To be clear about Elon, I don’t believe he has a classic stutter. It’s just that he’s constantly interrupting himself and thinking five sentences ahead of what he’s uttering. Maybe Elon is just like other guys where our brains shut off when talking to a beautiful woman, which allows Elon to then talk normally :)
OK, I was going to stay on topic but....
As soon as I saw him "stuttering" I understood the root cause...he may think ahead, but he is also running more than one algorithm at a time and comparing the results....
However when a hottie shows up most of his computing power is processing stimulation, and less able to section off different parts of his brain for multi-tasking.