Do you not understand how they would acquire LESS value that way? This topic is worn out and moot.
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EVNow
Well-Known Member
It's Tesla's option whether to pay in cash or stock.
less value, why? The bond holders get shares at 360$ for their 920M while share price is at 400$, so they get 40$ per share for these 920M more?
Fact Checking
Well-Known Member
You are wrong about both directions, the conversion rules of the notes are more favorable to Tesla than the outcomes you describe:
- Below $360, as per the 2019 notes prospectus Tesla has the right to increase the conversion rate, i.e. reduce the conversion price all the way down to around $250, at their discretion. So they don't have to go through a capital raise if they want to induce conversion to shares.
- Beyond $360 Tesla doesn't risk dilution, as Tesla has the right to pay the notes in cash. Tesla pays $920m and a "hedge contract" provides the rest of the cash. (Up to an about $560 share price IIRC.)
- Elon also reiterated it several times that they'll pay back the notes on cash, regardless of the stock price.
- Tesla made enough cash in Q3 alone pay off the notes in cash. By March 2019 they'll have the Q4 and a good chunk of Q1 income as well.
You're probably not smart enough to make it in investing, and worse, you're leading the rest of us on a pointless chase here.
If I owe you a million dollars and I have the option to pay you in shares or cash, you get LESS shares if shares are worth more money. You get more shares if shares are worth less. Either way I make up a million bucks to you
I'm gonna put you on ignore if you continue to pursue this topic, you're coming off kinda funny to me.
Wasn't quite sure what you meant so I looked it up. Guess I was GOTV (LD-18 Dems). Go Prop 127... hoping we target 50% Clean Energy in Az. A shame if APS wins out (they're funding the opposition).
Get this... Tesla called me last week asking about my interest in solar. I said I was with SRP, their response was once again blank... nothing they can offer me yet.
When is that lawsuit going to settle with Tesla, anyone? I've got more sun hitting my house than most of you and Tesla walks away from me everytime. A few months back, I signed up for a $1,500 rebate on a Powerwall through SRP (that's our power here, half of Phx area, the rest is APS). The joke was on me, I couldn't get the Powerwall (on backorder) in time for the rebate so I bailed. All I know is there were 2 parts to the lawsuit (Tesla vs SRP). One part settled which resulted in this stupid rebate, and to use their panels for a solar farm west of Phx. What about the other part? All I know, seems quiet.
Anyone?
But what about a regular plug (electrical outlet). Are you saying one cannot install an outlet on an outside wall of a building?
Super curious
Fire Away
In most of the major European city centres you could not install charging outlets on the outside of apartment buildings or terraced homes, pedestrians would trip over the charging cables. These houses were built hundreds of years ago and don't have parking garages, therefore tenants/apartment owners don't have an option to own parking spaces. It's street parking for everyone and people spent a lot of time in the evenings trying to find a space for their car when they come home from work. More and more public electric charges are being installed by cities, but it's only just started and no apartment tennant/owner can claim the nearest charging spot as their own.
In all fairness to them, I had no idea how any of the bond stuff worked, and now understand that Tesla pays the same amount regardless, just in shares or cash. For someone who isn’t up on all of this, it’s actually kinda helpful(even if it feels redundant to those who are in the know).
Maybe I was being too harsh. I had the mechanics of convertible debt systems pounded into me in my past weed-stock-penny-play days circa 2011. Convertible debt can be highly dilutive. It's very good that TSLA is doing the adult thing and paying these debts off in cash.
Sudre
Active Member
I can see a Tesla commercial for this if needed with the announcer saying, “The only way to get your Tesla pickup truck to do 0-60 in more than 5 seconds is to.....”. Then show a trailor with ALL the major brand trucks on it being pulled by a Tesla pickup on a drag strip. You don’t even have to show details of the other trucks or specifically call out a brand. Best to blur out or camera angle block all badging. Viewers can fill in that blank on their own. Then the announcer would say, “otherwise it will do it in 3.2 seconds.” Then show the Tesla pickup truck P+ crossing the line by itself with a time of 2.9 seconds at which point the announcer would say, “oh.... I meant 2.9 seconds.”The difference in this case, of course, is that the analogy to the Tesla pickup would be 190 proof
It's stats are going to just crush anything on offer by anyone else. I mean, not even close. They could demo it hauling a veritable road train of loaded F-150s, one tethered after the next, down the highway at highway speeds. And everyone who deals with any sort of remote work sites is going to want one when they see that the truck itself can be used a many-kilowatt "generator" that you never have to refill (just plug in overnight), as well as a compressor for air tools.
dandurston
Member
Yes Elon said they are going to pay off the 920 million in bonds using cash, but the question of how things are looking if they were to pay them off in stock is not moot for several reasons:
1) There are still lots of folks out there that don't believe Tesla can pay them in cash, so if the stock is looking promising for paying them off that gives Tesla another option should their future cash generation disappoint. Thus having the ability to use stock de-risks the situation, even if they aren't going to do it.
2) Lots of folks want Tesla to do a capital raise to fund growth. Choosing to pay off the bonds using stock rather than cash is basically the same thing but with better optics since there isn't the narrative that Tesla has burned through their money and needs more. So I can see Tesla deciding to pay them off in stock. For now they are saying they will use cash, but I think a lot of people would agree that paying them off in stock would be better because it leaves an additional billion in Tesla's bank account.
1) There are still lots of folks out there that don't believe Tesla can pay them in cash, so if the stock is looking promising for paying them off that gives Tesla another option should their future cash generation disappoint. Thus having the ability to use stock de-risks the situation, even if they aren't going to do it.
2) Lots of folks want Tesla to do a capital raise to fund growth. Choosing to pay off the bonds using stock rather than cash is basically the same thing but with better optics since there isn't the narrative that Tesla has burned through their money and needs more. So I can see Tesla deciding to pay them off in stock. For now they are saying they will use cash, but I think a lot of people would agree that paying them off in stock would be better because it leaves an additional billion in Tesla's bank account.
General Public Can Now Order Own Tesla Model 3, S & X Parts
https://epc.teslamotors.com/#/catalog
Any thoughts on impact.
https://epc.teslamotors.com/#/catalog
Any thoughts on impact.
anthonyj
Stonks
Institutions slowly accumulating, getting ready for The Big Squeeze. They know dumb money is fleeing out of FAANG and will pour into Tesla, the latest and greatest growth story stock. Watch
Yup, I firmly believe this assessment is correctInstitutions slowly accumulating, getting ready for The Big Squeeze. They know dumb money is fleeing out of FAANG and will pour into Tesla, the latest and greatest growth story stock. Watch
It took me a while to realize it... I actually sold this option exactly at today's peak. I NEVER get that lucky. It was an order I made last month and forgot about it. Maybe I need to set a reminder that something's getting close... I really wasn't planning on selling for a while, and now would be a lousy time to get back in. Options make me nervous. Doesn't make sense when I also have cash available but don't want to risk any more IMO.
As long as the price is in the region of $360 Tesla can alter the conversion rate so the bondholder gets more shares than originally documented to make up his end.
i.e. Initial rate is 2.7788 shares of common stock per $1,000 principal amount of notes which puts the price at $359.87. If the price on Wed 31st Nov 2018 is $330 they can up the conversion rate to 3.03
However, I would prefer Tesla to pay this early as they have done with other debts. It will be perceived as a positive and removes the $360 issue (even though it's really a non-issue) and allow the price to move higher unencumbered.
i.e. Initial rate is 2.7788 shares of common stock per $1,000 principal amount of notes which puts the price at $359.87. If the price on Wed 31st Nov 2018 is $330 they can up the conversion rate to 3.03
However, I would prefer Tesla to pay this early as they have done with other debts. It will be perceived as a positive and removes the $360 issue (even though it's really a non-issue) and allow the price to move higher unencumbered.
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bdy0627
Active Member
Nasdaq going lower. How is TSLA holding like this? I'm pretty amazed at this stock right now.
It's nice to see. I guess there's nice upwards pressure. Plenty of people buying even on small dips.
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