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

[theschnell]

Very very happy about Cap raise. I hope they build Cybertruck Factory with capacity of at least 200k units per year, ideally 500k units, instead of the 50k units that was rumored.

 

[Fact Checking]

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!

It's my assumption, based on how Elon announced it:

"Tesla April company talk will be from our Giga New York factory, where we make SolarGlass & several other products. Will also offer customer & media tours."​

Note how he started with "Tesla April company talk" assuming that the reader knew the context - the only upcoming talk he tentatively scheduled for April is the Battery Investor Day.

I believe the thing that changed is that it won't only be about batteries. But this is all my assumption.

 

[Mich]

Curious to see what 10:30 EST brings.

why? this is in 2 min.

 

[azaz]

the cap raise is good and saved us short term from what was setting up to be a bloody day and long term will help with quicker expansion, it's a win/win.

also should we expect a call with investors post cap raise?

 

[theschnell]

I also love that shorts that were in the know and tried to get ahead of this cap raise announcement are now getting killed.

 

[Krugerrand]

I set my buys at $726 and $730...which shows you how fast it was moving. Didn’t check the order book, I just frantically (and quickly) set some limit buys on my phone when I saw the nonsensical premarket trend.

Got to love a well thought out plan.

It’s like, ‘Why are the avocados so cheap? Are they mispriced? Are they almost passed their shelf life? Do I need avocados? Oh crap, here comes a family of 12!!’ *grab as many avocados as you can carry and run to the checkout*

I may or may not be speaking from experience.

 

[Highway2Heel]

why? this is in 2 min.

It’s just when margin calls are made by brokerages. I don’t think there will be much action today but some days there is quite a bit depending on which side of the fence may be overextended on margin.

 

[lafrisbee]

Now I want to buy more shares. But I'm all in!

Can anyone give me pointers on best strategies when collecting empty bottles?

I CAN> Now remember this was my strategy in the fifth grade back in 1967.
Don't even start looking in the ditches till you are at least 2 blocks from a place that will give you the deposit. Get out early on a Saturday morning (Sunday morning is good too, but getting to skip church was hard to do back then.) Hop on your bike and ride the busy roads while looking in the ditches. A basket on your bike makes you big time money, but putting a croker sack in it makes you a tycoon. You can over fill the basket with a good croker sack makin 2-3x the number of bottles. Plan your route so when your basket is full you are close to a store that will take em. Do not eat too much candy, and don't waste your time drinking a coke until the ditches have been scoured.
Also throughout the day keep your eye in the ditch.
And my best advice (when deposit was only two cents).... Look for the extra value in the ditch besides the bottles. One Sunday morning I found a $20 bill. I had never held a $20 bill. When I first saw it in the ditch I thought it was play money. I still hopped off my bike and went in and got it. I was already thinking how I was going to prank my friends... but it turned out to be real... that was 1000 bottle deposits.
Well actually it was a lot more. My Momma told me to let her hold it. She never gave it back to me. But I leveraged it for several times the amount with, "Momma can I have 2 dollars of the 20 dollars I gave you?" You do that 20 times and you have doubled your money.

 

[StealthP3D]

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 ...

Yes, pretty opaque but that's the best way to fend off nuisance lawsuits by fakely aggrieved "shareholders".

Given the wording (strengthen the balance sheet, as well as for general corporate purposes) and what we already know, I think we can deduce there are a few things coming together over this year that will exceed the ability of Model 3 and Model Y profits to cover:

The development/ramp of the Cybertruck and the Tesla Semi
The expansion of production at Freemont and Nevada
The continuing expansion of GF3 in Shanghai for Models 3 and Y and (probably) batteries
Likely huge new battery production (this is probably a big one)
G4 in Germany may be a bit more expensive than anticipated or Tesla has increased the scope of production/product/technology development there

While I don't ever like dilution if it can be avoided, this is probably needed to take Tesla to the next level. It costs a lot to bring new models to market, increase production capacity and develop massive battery production (this is my assumption) and I don't think anyone can do it in a more capital-efficient manner than Tesla. This move will be cheered by the markets because it puts Tesla on a more solid footing and is very reasonable in terms of amount. The Cybertruck, Semi and vertical integration of batteries have huge profit potential and as someone anxiously waiting for my own Cybertruck this increases my confidence that it will be released on time.

 

[gerebgraus]

And now a wild, wild guess: The offering will be oversubscribed.

 

[ggr]

these are fake harvesters, really really, just smoke and mirrors.

Yeah, must be fake harvesters, there aren't any trees on that land... any more.

 

[Cupidchild]

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

my broker can't buy or sell pre or post market. go figure

 

[ev-enthusiast]

Wedbush analyst Daniel Ives notes that Tesla announced it will be offering 2.65M shares to raise about $2B to support its balance sheet as the company continues its build out of Giga 3 in Shanghai. The analyst believes it is a "smart move" to take advantage of being back in a position of strength with the Street and focus on raising capital at a time when EV demand is just starting to inflect with China the main fuel in the growth engine.

 

[johnnybgood888]

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

Agreed, was hoping to buy some LEAPS on the cheap this morning!

 

[Artful Dodger]

Why didn't they do this at $900 SP. Or is timing strict with rules Idk?

You mean before the 10-K was released?

 

[sundaymorning]

The share price is up ~$200 from the earnings call. Tesla is very wisely capitalizing on something they couldn’t anticipate back then.

IMO its a good move and makes a lot of sense. Yes, Elon said tat ER call they spend what they can but lets not forget at that point in time the company value was many billions lower than today.

With a much higher SP everything changes and you reconsider if its a good time to plan for the future different than before. They did exactly the same back in 2013 and it has been proven to be good for shareholder at the end too.

The dilution is meaningless and now we own a portion of that cash collected to it does not make any difference unless you sell today at a low price and buy later again in at a higher one.

I did expect at the ER them to announce more capex investments which did not happen but now the situation is financially even better which may give them the opportunity to reconsider. They produce cash and collect cash to push faster forward.

ArkInvest has a similar opinion and is more confident in their bull case now because they see the requirement to build more GF to cope with the demand. Beside Texas there are Twitter rumors about talks in Bulgaria and we know from Germany (Nordrhine Westfalia and Lower Saxony) that the leaked GF talks last year have been correct.

.#Tesla’s capital raise increases our confidence that it will gain market share in the #EV market during the next 5 years, increasing the probability that our bull case for the stock is correct.

Cathie Wood on Twitter

@ARKInvest
included $15B of equity dilution in its 5 year forecast for $TSLA, so $2 billion+ now makes sense. We wouldn’t be surprised if Elon announces plans for another #Gigafactory in China, a vote of confidence in the resilience of that country.

Cathie Wood on Twitter

Semi truck ramp financing secured. Let’s go!

 

[killianss]

+$11 .. this what normal is..

How spoiled we are!!

 

[Artful Dodger]

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.

All that's true in a legal sense, but I think your research will show you that Tesla's past equity and bond offerings have all been oversubscribed at the offer price, and there is no temporal reason why this offering should produce any different results, shortzes (and their thesis) be damned.

Bottom line is there is NO BETTER PLACE to park a billion dollars right now, with Tesla growing at > 50% per year. The rest is Kabuki Theatre.

I predict the offering will close tomorrow, including the extra offering.

Cheers!

 

[Curt Renz]

 

[larmor]

At this point, it would be a fair question to ask where will the new capacity be to produce the Semi, model Y, cybertruck, and solar glass tiles? Presumably the share offering will be for increasing capacity.

The playbook it now known, so it appears to be just a matter of more productions lines, or factories...