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

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There were multiple times the stock dropped into 370's last week. I said iI expect the average of the offering to come in around the low 400's

You're still not helping your case. Perhaps you should just accept that we disagree on the facts?

TSLA.1-Wk.2020-09-04.png


Hint: You're not going to like the answer, since it burns your argument to the ground and all...
 
Ok......since its board mob mentality with your views, which it totally fine.....someone please give a solid answer as to why do an offering with those terms.

Again people, just to be clear I'm not questioning the action of raising money. I'm specifically talking about the terms which tesla willingly decided to forego a set share price for the offering. Given the context of the huge rally in the share price....coming off a post stock split rally.....why would tesla take that chance. Any logical financial person would do an offering to lock in elevated share price. And don't give me banks wouldn't do it...its practically always the case that company's do offering at elevated stock prices.

So please, I want to be convinced here

In a fixed price offering, it is the institutions doing the buying from Tesla.
In a market priced offering, it is the institutions doing the selling for Tesla.
Which do you think it it is easier to get institutions to sign up for?

Hey bank, we're at an all time high and moved double digit percentage in the last week, wanna buy?
v.s.
Hey bank, would you mind selling some shares for us? We'll give you a cut.
Which do you think Tesla would get a higher price for? The one where the banks take all the risk, or the one where they take none of the risk?
 
You're still not helping your case. Perhaps you should just accept that we disagree on the facts?

View attachment 585867

Hint: You're not going to like the answer, since it burns your argument to the ground and all...

Lol I'm sorry, it only touched 370's once last week. I will admit my faults while still stating I believe the average issued share price will be low 400's
 
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Yes, China is a big place, but most of the customers for a luxury sedan are not too far from Shanghai. The “wave” made sense in July, but we’re 2/3rds of the way through the quarter, and Tesla announced a capacity of 200k/year at the end of Q2, so we should be closer to 16k units per month, or at least 15k. At that rate, Tesla would need to deliver over 25k units in September to justify that production capacity, which is more than double their August deliveries. Something doesn’t add up, and we shouldn’t simply dismiss it.
Whether it’s insufficient demand for the exact product mix on offer, waiting for different variants, waiting for govt. incentives, whatever it is, we should understand it. But dismissing it doesn’t help.
I agree with this. Even Fremont has capacity of 400K/year for 3/Y and 90K for S/X (per Q2 2020 Updates). For 2020: Tesla is nowhere near 490K deliveries from Fremont. A lot of this has to do with Covid. After delivering over 11K in both July and August, I don't think Tesla will deliver 25K units in China in September, but we will find out. Tesla did cut the price for Model 3 SR to 291,800 Yuan (today value is: $42625) to qualify for some subsidies. It was 323,800 Yuan (today value: $47,299) before the price cut. (Yuan has increased in value vs. US dollar since this article was written. Source: Tesla reduces Model 3 price in China to regain incentive access, now just $38,500 - Electrek ) This might move more vehicles but affects the margins significantly: more than $4.6K per unit.
 
I agree with this. Even Fremont has capacity of 400K/year for 3/Y and 90K for S/X (per Q2 2020 Updates). For 2020: Tesla is nowhere near 490K deliveries from Fremont. A lot of this has to do with Covid. After delivering over 11K in both July and August, I don't think Tesla will deliver 25K units in China in September, but we will find out. Tesla did cut the price for Model 3 SR to 291,800 Yuan (today value is: $42625) to qualify for some subsidies. It was 323,800 Yuan (today value: $47,299) before the price cut. (Yuan has increased in value vs. US dollar since this article was written. Source: Tesla reduces Model 3 price in China to regain incentive access, now just $38,500 - Electrek ) This might move more vehicles but affects the margins significantly: more than $4.6K per unit.

Tesla can definitely do 25k across china in a month long push for the final month of the quarter.

When I posted about it, I should have stated I had higher expectations for China in Q3. But no one should be thinking 25k isn't possible for Sept...its definitely possible
 
OK, a serious post from this ex-Wall Streeter. Two points:

A considerable number of you - and a very much larger number of those still in the professional investment world - need to write 500 times on the blackboard:

SPDJI is NOT FASB
SPDJI is NOT FASB
SPDJI is NOT FASB
SPDJI is NOT FASB
SPDJI is NOT FASB
SPDJI is NOT FASB
SPDJI is NOT FASB
SPDJI is NOT FASB
SPDJI is NOT FASB

"Can't comment" is a disgusting and indefensible statement. And "size representation"? Guid Gawd, mon. SPDJI had better re-look at what its Index is designed to represent.

Second, on Battery Day: I do have a nagging...and not niggling...concern. Battery Day was supposed to come late last winter, then last spring, now in a few weeks.
.
I start to doubt that battery day will bring in anything special.
The reason is that there is a ceiling set by Elon: the battery density that makes Electric airplane might be achieved in FOUR YEARS.
So what could happen this coming 9/22? I hope it will not be the already known 1Million Mile battery; that will cause the SP to crash again.
What else do you think it will be?
 
Ugh the complaints from some on how this board changes a persons original post's meaning is quite true. I never said I had a issue with the offering. Simply offered my view of the TERMS and how the situation has unfolded

Have to agree am puzzled with ATM terms. At the time was completely convinced had everything to do with S&P and was a carrot to meet the committee part of the way. Based on that I believed that TSLA would not even execute the raise without the S&P announcement.

Now I discover that all five billion were unloaded basically immediately.

Very happy with the price the money was raised at and look forward to TSLA being able to execute with this cash to accelerate the mission... although it did seem to me that they had enough on their plate and more than enough cash to execute, not to mention highly profitable (for TSLA, historically speaking) quarters that appear due for 3Q and 4Q. Perhaps TSLA simply wants a certain percentage of MC in cash at all times, and due to the SP growth that percentage needed to be topped off.

BUT if the intention was simply to raise money with the stock at 550 in the premarket...well announce all 5B at 480. or 470. Why not? Almost certain would have done better in average price. And while maybe you hate short term traders, it doesn't make sense to set out to punish the short term longs either (if so, consider my short term account punished:oops:).

Did they gamble that the price would continue to moon and they would get even BETTER terms by selling ATM... possibly. The SP is so high compared to where it was I don't consider that an unreasonable gamble. Either way, the shareholders made out well. Seems they could have made out better simply by slapping a number on it.
 
Step away from the keyboard and give your brain a chance to catch up. Everyone.

Clearly more cash does, otherwise they would not have done the raise. Something has changed.

Very worse case scenario; they’ve taken another step toward having enough money to survive the apocalypse. As the company expands and gets bigger, they need more cash on hand to keep operations going should another black swan event hit.

One thing I’ve learned watching this company; they are always planning and preparing for several steps ahead. They were thinking SuperCharger Network before it occurred to anyone. They were thinking battery factories before anyone thought about it. They were doing recession preparedness before Covid blindsided the world. They’re changing the very way cars are made and nobody else (the exception being Monroe and us plebes here) is even acknowledging that a vehicle made of hundreds of LESS parts turns the whole industry upside down —

The list goes on.

Something has changed. Tesla never does anything without having an idea, a plan.
Tesla could by Panasonic North America. Isn't it a subsidiary now of Pana Japan?
 
Why would they raise cash to fund something that can be funded using internally generated cash flow? Over the next few quarters Tesla may have $1B in cash flow each quarter. Obviously the credit ratings will improve in the next few months again.

This argument (Raise tons of cash and build build build) makes no sense. Tesla is already growing at 40%.

I dont think Tesla got played by SP into raising. I think Tesla raised because they have info that we don't.
The "info" Tesla has could be related to "buildbuildbuild". The timing just fits too well. Raising the money right before they can reveal the battery improvements and the plan to build the necessary vertically integrated battery teraplant(s) to set Tesla up for the foreseeable future.
And one last point. Tesla did not decide to offer a set number of stocks, they determined an amount of money they wanted. offering a set number of stocks deals more with the fear of diluting the stock. Establishing an amount of money means the emphasis is on a financial goal, probably specific to the needs of the company. Tesla already had a bank that made them financially secure. The raise was not expected. The only big thing I can see is that the Battery Researchers found something that should be "leveraged" right away.
 
In a fixed price offering, it is the institutions doing the buying from Tesla.
In a market priced offering, it is the institutions doing the selling for Tesla.
Which do you think it it is easier to get institutions to sign up for?

Hey bank, we're at an all time high and moved double digit percentage in the last week, wanna buy?
v.s.
Hey bank, would you mind selling some shares for us? We'll give you a cut.
Which do you think Tesla would get a higher price for? The one where the banks take all the risk, or the one where they take none of the risk?

I think this is the most logical explanation for the terms of the offering. The remaining question is the timing of the offering. Why did Tesla do this last week when the share price was under a lot of pressure?
 
I think this is the most logical explanation for the terms of the offering. The remaining question is the timing of the offering. Why did Tesla do this last week when the share price was under a lot of pressure?

Didn't see much pressure when they set it up. Perhaps even they are surprised with the overall declines. In the end, it is immaterial to them. It is done.
 
I think this is the most logical explanation for the terms of the offering. The remaining question is the timing of the offering. Why did Tesla do this last week when the share price was under a lot of pressure?

Probably in preparation for inclusion on the S&P 500. They had to free up some reasonably-priced shares for the various index funds to buy up.
 
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To play devil's advocate, considering I'm now well deep into the "never gonna happen" camp:
SP wanted to add TSLA but saw lots of risks.
Instead of waiting till next quarter, it suggested TSLA do an offering to beef up the balance sheet and give the SP some assurance
In the process of doing so, TSLA flushed out all front runners and speculators
TSLA will issue more stock when inclusion happens this week to ease buying pressure, if needed
"We must get past the Great Filter" -> TSLA must go through a filter to get rid of all the short term gamblers.

No more room. Never gonna happen camp was a one-man tent shared by about three of us. Get off my mountain!
 
Tesla can definitely do 25k across china in a month long push for the final month of the quarter.

When I posted about it, I should have stated I had higher expectations for China in Q3. But no one should be thinking 25k isn't possible for Sept...its definitely possible
Sure, 25k in September is not physically impossible, but that kinda completely negates the argument that the reason for the August delivery numbers was logistics, which are “difficult”. In other words, why go for a 25k units/month push when deliveries could have been so much smoother throughout the quarter?

What is the factor that caused the low number in July and August, and is that factor no longer in play in September? The answer to that can’t be “logistics”, unless we get reliable info that Tesla increased the number and/capacity of their stores in China by a significant margin in the past month. If it’s something else, what is it?
 
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My apologies in advance if this turns into a slugfest, but can anyone make sense of the latest threat from Trump toward companies doing business in China? Why is he crashing the market just before election?
My belief is that his base doesn't really care about the economy or will believe it's good if he tells them it is, but attacking China is one of his promises. It is not good strategy but somehow doing the wrong thing has often worked for him.