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

[Causalien]

MS downgrade= cash raise coming soon

GS downgrade= cash raise coming soon

MS + GS downgrade same day= biggest cash raise yet. ( cheap money available...don't go for $5bil EM, get $10 bil and build out a couple factories asap )

'soon' timing is 'battery investor day'

Don't get this. Shouldn't they be upgrading to raise the SP before cash raise?

 

[Singuy]

Don't get this. Shouldn't they be upgrading to raise the SP before cash raise?

Also shouldn't you go balls to the walls with expansions at least after this covid dust settles? Expanding too fast and hard during a recession is a good way to shoot yourself in the foot.

 

[MTL_HABS1909]

Don't get this. Shouldn't they be upgrading to raise the SP before cash raise?

No. Lower share price means they can get more shares for their clients for a given amount raised.

 

[Causalien]

No. Lower share price means they can get more shares for their clients for a given amount raised.

Ah, I see, so they are working for the clients instead of TSLA. Weird dynamic. Isn't tsla paying?

 

[Unpilot]

not refuting the endless gish gallop of denier talking points.

Learned something new today did I.

 

[Artful Dodger]

I’m not usually a big fan of dilution that happens with equity raises - $10 Billion would be a ~5.5% dilution At current market cap - but it would eliminate a big chunk of the debt potentially if its used for that

Yeah, neither are Elon or Zach. In fact, they said this just recently on the 2020 Q1 Earnings Call Q&A: (Feb 29, 2020)

"Later in the call, Credit Suisse analyst Dan Levy asked if Musk and Kirkhorn thought it might make sense to raise cash to help pay off Tesla’s massive $10 billion debt pile or to buy up other companies.

"Musk jokingly asked Levy who Tesla should acquire but then went on to say that “diluting the company to pay down debt doesn’t sound like a wise move.” Kirkhorn reiterated Musk’s earlier point, saying, “We are not [cash] constrained.”​

So there's that...

Cheers!

 

[MC3OZ]

I'm not sure of the long-term expense of value; if they are able to reduce the cost of the battery down by 15-20% right now...what about 5-10 years from now? What new thing is this behemoth going to create on the software side with so much hardware sold from the ramp up right now?

I'm in the camp expecting a raise because now is "peak opportunity", Tesla is ready and there will never be a better time to expand rapidly and grab market share.

But my hunch is they simply want to spend most of the around $8B they currently have, so the raise would be more to achieve a $2-3B buffer.

And I think they they are going to starting building battery factories in the US, in an election year, the Trump administration might be highly motivated to help.

China is building one battery gigafactory a week; The US one every four months : electricvehicles

 

[MC3OZ]

The other option I recommend is short term massive incentives to purchase FSD.

Buy FSD before date X, get discount Y on FSD, on when purchasing new Tesla after date X.

X = December 2020, Y= 75% (65%?) - not 100% sure on this number..
X = December 2021, Y= 50%
X = December 2022, Y= 25%

And/or add referral bonuses around FSD, 5% discount for every referral, 10% discount for both if the referred customer purchases FSD.

IMO this is similar to a capital raise, Tesla are shareholders are forgoing some future income to get money now when Tesla most needs it.

But I would argue this lever is better than a capital raise, we might get 2 FSD purchases 100% + 25%, instead of one purchase,... So 125% instead of 100%.

It is likely many current owners who haven't bought FSD, might wait a year or 2 and get it with their next Tesla...

Now they will likely buy FSD, knowing their old car can be used as a Robo-taxi and the purchase of FSD for their next Tesla has a 75% discount.

My discounts might be too aggressive, but now is "Peak Opportunity", I'm sure any investments Tesla makes in battery production will pay off.

However when FSD Is fully working that it's self is a sufficient demand lever.

EDIT Disagrees are welcome, I sort of expect them....I may have the dimension of the demand lever all wrong... But I think something may be needed to get buyers off the fence, and get cash in the bank. For clarity, the initial purchase price is always 100%.

 

[Causalien]

Yeah, neither are Elon or Zach. In fact, they said this just recently on the 2020 Q1 Earnings Call Q&A: (Feb 29, 2020)

"Later in the call, Credit Suisse analyst Dan Levy asked if Musk and Kirkhorn thought it might make sense to raise cash to help pay off Tesla’s massive $10 billion debt pile or to buy up other companies.

"Musk jokingly asked Levy who Tesla should acquire but then went on to say that “diluting the company to pay down debt doesn’t sound like a wise move.” Kirkhorn reiterated Musk’s earlier point, saying, “We are not [cash] constrained.”​

So there's that...

Cheers!

I don't support dilution right now. The world's economic activity is shrinking so there's no point in rapidly expanding production.
It'd maybe make sense, if the raise can reduce cost to make EV less expensive than gasoline car so that we can execute an oil-extinction event.

 

[Silentk]

So how long before we see a 10 or 20 for 1 stock split? I wonder if that's what Elon's real meaning was when he said the stock price was too high... the individual share price and not the company valuation. The high SP makes it more difficult for the smaller guys to get into the stock and I wonder if that isn't a contributing factor in the steep climb in Nikola's SP today. Much easier to see a 50 or 100% climb when the opening price is less than $100.

Is there any downside to a stock split? Upside seems obvious that $50 price is more attractive to Robin Hood and his merry men and women.

Also, would a stock split affect short sellers? Prompt a share recall or similar? Or nothing at all?

Any answers appreciated.

 

[EVortex]

Thank God , it is an electric car in our 1960 Dodge 440 9 passenger station wagon , my Dad would crack the back window and my brother I would be puking from the exhaust fumes before we got home from church.
We thought we were allergic to church.

When I was a kid my dad test drove a Dodge Polara station wagon with rear facing back seat, but ended up buying an Olds Vista Cruiser. I guess we traded exhaust fumes for leaking roof window. The good old days! I sure love my Model S.

 

[MC3OZ]

I don't support dilution right now. The world's economic activity is shrinking so there's no point in rapidly expanding production.
It'd maybe make sense, if the raise can reduce cost to make EV less expensive than gasoline car so that we can execute an oil-extinction event.

Let's see what comes out of Battery Day... IMO it is likely to justify significant investments and rapid expansion...

 

[MP3Mike]

Is there any downside to a stock split? Upside seems obvious that $50 price is more attractive to Robin Hood and his merry men and women.

Robinhood supports fractional shares so a split shouldn't make any difference for those merry men and women. (Unless they want the share price lower to make options more affordable since I don't think they support fractional options.)

 

[EVortex]

Is there any downside to a stock split? Upside seems obvious that $50 price is more attractive to Robin Hood and his merry men and women.

Also, would a stock split affect short sellers? Prompt a share recall or similar? Or nothing at all?

Any answers appreciated.

I did well on the results of multiple splits of IBM back in the 90’s, but not sure about the impact in today’s market with high priced stocks like AMZN where institutional investors are the majority - would it prompt more small investor participation? Not sure. What do others think?

 

[TheTalkingMule]

Cash raise! Get it done!

 

[JustSaying]

When I was a kid my dad test drove a Dodge Polara station wagon with rear facing back seat, but ended up buying an Olds Vista Cruiser. I guess we traded exhaust fumes for leaking roof window. The good old days! I sure love my Model S.

Yes by the time my Dad bought the 1963 9 Passenger Dodge had figured it out and put rear window vents in.
Too late for me ,apparently you don't recover from brain damage. smile
Amazon Photos

 

[Maitri982]

That's why companies change their plans rather than come out with a product that might not sell well.

Huh?!? That's exactly what the other companies did. Produced electric or hybrid cars that simply are not competitive.

This is the same BS about completion is coming we have heard for years. I'm still waiting...

 

[Off Shore]

Periodic reminder that the utility of the ignore button is substantially reduced by continued replies to trolls. What this board needs is a numeric field called Ignored_By in each member's public bio.

 

[AlMc]

Don't get this. Shouldn't they be upgrading to raise the SP before cash raise?

No, they need to get their clients in at a lower SP before the raise and the SP takes off (IMO)

 

[AlMc]

There is no East coast factory in Tesla's immediate plans. That was a common misinterpretation (started by Gali) when Elon said the new central US factory would build Model Y for the East coast.

Gali: decaff, bruh?

Living in Delaware I have been trying my best to promote a factory here with local representatives