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

[Sofie]

Maybe they should’ve went ahead and taken their stock offering shares the very moment the press release came out.
I almost thought they had done so when I seen the premarket before I got up this morning and then just after the release came out.

 

[HG Wells]

On the first day of Christmas my company gave to me.
A factory in Italy.

 

[CorneliusXX]

5 billion here, 5 billion there, soon we’re talking real money.
So IIRC, 5 billion now, 5 billion in August, 2 billion in March, so 12 billion raised this year. How many gigafactories can Tesla build for 12 billion?
I see it mainly as a vote of confidence for their battery plans, they must be making good progress with their new batteries to see the need for capital to build battery factories.

I hope Tesla will share some more detailed thoughts on how they plan to spend the cash. Battery day implied they would be spending substantially more CapEx to build out TWh cell production and move upstream in the supply chain. But there hasn't been too much detail on exactly where that extra cash will be spent.

Tesla already has a large warchest and is throwing off substantial FCF - so their CapEx spending could go up even more than their recent guidance ($12b over 2021-22). They already have $14b of cash on the balance sheet and have generated over $2b in free cash flow this year - not to mention what they will generate between now and 2022.

Perhaps this is just opportunistic and Elon thinks raising cash is a good way to deflate the squeeze.

 

[Highway2Heel]

Indonesia factory is closer to a reality.

 

[TheTalkingMule]

Hoping this goes toward a 20% or even controlling interest in the spunoff LGChem battery business. The timing is about right.

 

[H Mak]

Was it Cathie Wood who said compared to other automakers, Tesla's balance sheet is a fortress? Well, it looks like they just pulled up the drawbridge.

 

[Chocochip]

'member when the Big Boyz were supposed to show up on the EV scene with their "properly-made" cars and wipe the floor with that Silicon Valley startup that is Tesla?

Tesla just announced it's raising $5B the way they would announce a different cup holder design - as a BTW thing.

Hehe... Big Boyz!!

 

[traxila]

Wow.

Never a dull moment in Musk Land!

Bravo, Elon! Spectacularly well done!

What oracle could have foreseen these past six months?

Long term holders rejoice!

Weekly options holders, didn’t mommy tell you what could happen when you play with fire?

Damn my fingers are burning!

Hey short termers, what’d y’all think here? I can’t get a handle on this at all. The five billion is nowhere near enough to satisfy the buying needs of the index funds. But this is the short term market.... all psychological, and the real buying probably will not take place until next week. Think we may have seen the peak for this week already.

Volatility anyone?

 

[juanmedina]

On the last offering from what I remember we were $534 premarket and by the 8th we hit $330. I wonder how this will turn out this time and I am somewhat worried about my options for the inclusion.

 

[Krugerrand]

Perhaps this is just opportunistic and Elon thinks raising cash is a good way to deflate the squeeze.

No way. They have a plan. They always have a plan. I’ve got to think they’ll be setting up an insect and reptilian sanctuary on the back 40.

 

[UkNorthampton]

No way. They have a plan. They always have a plan. I’ve got to think they’ll be setting up an insect and reptilian sanctuary on the back 40.

Elon don't without a plan.

 

[Krugerrand]

Was it Cathie Wood who said compared to other automakers, Tesla's balance sheet is a fortress? Well, it looks like they just pulled up the drawbridge.

And yet Elon’s most recent email to employees was about pinching those pennies.

 

[heltok]

$12B before, +$5B raise, +$1B Q4, +$1B from deferred revenue = $19B in Q4 ER? I would assume Giga China 2 with Model 2, solar, storage and chargers would be paid by loans from Chinese banks. What are Tesla up to? Giga eastcoast? Giga Nickel Indonesia? Giga India? Buy all their own production for Robotaxi? Buy Hertz?

 

[MartinAustin]

I hope Tesla will share some more detailed thoughts on how they plan to spend the cash. Battery day implied they would be spending substantially more CapEx to build out TWh cell production and move upstream in the supply chain. But there hasn't been too much detail on exactly where that extra cash will be spent.

Tesla already has a large warchest and is throwing off substantial FCF - so their CapEx spending could go up even more than their recent guidance ($12b over 2021-22). They already have $14b of cash on the balance sheet and have generated over $2b in free cash flow this year - not to mention what they will generate between now and 2022.

Perhaps this is just opportunistic and Elon thinks raising cash is a good way to deflate the squeeze.

I was going to make roughly the same point, you beat me to it.

At the Q4/2020 ER they will announce they have over $20billion cash in the bank. {aside: probably the best balance sheet of any automaker} This is enough to build four Gigafactories simultaneously, at the old prices quoted in 2014 when they were building the very first one. But things have changed since then: not only are Tesla's latest Gigafactories batteries plus auto manufacturing, the batteries are the new 4860 Battery Day design, whose machinery takes up much less space and are much cheaper to construct.

It's clear that from here on out, Tesla will always be constructing factories somewhere.

 

[viridi]

Cappers trying this a.m. It is cute watching what are large orders for pre-market being put in and pulled. Someone was playing games at $634.50. Then the game was $636.00. Now it is $636.81/$637.00. Challenge is, as has happened the past few days, it is just not working for long. Will be an interesting day with all the good news (which I feel includes the cap raise).

 

[Right_Said_Fred]

On the last offering from what I remember we were $534 premarket and by the 8th we hit $330. I wonder how this will turn out this time and I am somewhat worried about my options for the inclusion.

You must be aware of the difference between the two events? The drop you describe happened after the S&P committee decided not to include TSLA. This time we are on the cusp of being included, with a need for at least 120 million shares and likely a lot more.

 

[JRD1]

Interpretation 99: We foresee some investment banking business from Tesla and want to be included in the fees

Goldman Sachs is one of the underwriters of the latest stock offering...

Surprise surprise...

 

[Sancho]

First Principles:

1. When an industry is disrupted or created by new technology, the first firm to scale wins.

2. Scaling software businesses like Facebook doesn’t require massive capital, but scaling manufacturing businesses like auto and energy does.

So, regardless of how this capital is going to be deployed, being able to raise it at this critical inflection point of scaling, at such minimal dilution is...a good thing.

 

[Artful Dodger]

Here's a link to the HTML version of Tesla's Dec 8, 2020 stock offering:

SEC Filing | Tesla, Inc. | Dec 8 | $5.0B “at-the-market” Offering ​

And here is the HTML version of Tesla's Form 424B5:

SEC Filing | Tesla, Inc. | Dec 8 | Form 424B5 "Prospectus"​

Cheers!

 

[Todd Burch]

On the last offering from what I remember we were $534 premarket and by the 8th we hit $330. I wonder how this will turn out this time and I am somewhat worried about my options for the inclusion.

This is nowhere near the same situation.

The last runup was primarily just fueled by a stock split, which fundamentally doesn’t change things much.

This time it’s prior to an inclusion event in which a massive number of shares will be bought. The impact here will be relatively minimal and short-lived given the buying coming in the next few weeks.