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I believe on that question I got a 0/10. And rightly so.
dandurston
Member
NO! This is the classic mistake that gets made every time new shares are issued!
Tesla is not giving these shares away. They are paying off debt with them. Tesla winds up half a billion less in debt so the company is worth half a billion more. So more shares but more value. Share price stays the same. Instead of $60 billion / 171 million shares, its $60.5 billion divided by 172 million shares.
In other words, more slices to a larger pie. Pie per slice is the same. Better yet, if this move frees up needed liquidity then the pie grows even more and we all win.
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So what, now we're stuck between 360-365 for 4^H^H 3 months?
Not sure it entirely works that way. Yes, they have more cash on hand, and are, therefore, worth more, but the market cap also includes projected future growth, which isn’t linearly affected by an increase in cash-on-hand.
Oh man that's too bad... I thought you would at least deserved a commendation for original thinking!
Carl Raymond
Active Member
OT: Should you choose to hit a concrete wall or an oncoming identical car with equal but opposite velocity? In each case you go to zero velocity. The latter collision involves twice as much energy, but there are two cars to absorb it. My gut says they are the same, but I recall my physics teacher saying the wall was better. Maybe the correct answer is to choose the wall - think of the other guy!
OT
Yah, the mirror car is an ideal immovable object, the wall at least has a little give.
Yah, the mirror car is an ideal immovable object, the wall at least has a little give.
Artful Dodger
"Neko no me"
anthonyj
Stonks
North Jersey Tesla has about 1,000 Model 3s ready for delivery. Not joking. If I have time tomorrow I’ll go take a video. There are a few hidden lots where they store cars and only saw the huge abandoned Sears parking lot. It’s freaking nuts. December numbers are going to give longs and shorts a heart attack.
So these are spoken for cars?? Just clarifying.
Q1 positive cash flow secured.
Mr. market already said positive with past few days’ movements.
A week ago I started transferring my Roth IRA from my bank to a different broker that will let me go all in on TSLA. My account got liquidated this week before the big stock sell off. Thanks TMC! Now if they would hurry and transfer the funds before TSLA hits 400...
erha
Member
I just looked up the balance sheet of the Q3 report. I've got absolutely zero knowledge about balance sheets, but it seems that Tesla has about $9 billion in debt if I understand it correctly... Some of that debt has a fairly high interest rate I think. I assume any debt that came with SolarCity had a really high interest rate at least. Just thinking: Wouldn't it be better to use cash to pay down the debt that carry high interest rate? Could this be the reason for only paying half the convertible notes in cash?
Please correct me if I'm wrong. I'm getting a bit confused when looking at the balance sheet. There is something called "Current portion of long-term debt and capital leases" which totals about $2.1 billion. And then there is something called "Long-term debt and capital leases, net of current portion" totalling about $9.7 billion... What's the difference?
Please correct me if I'm wrong. I'm getting a bit confused when looking at the balance sheet. There is something called "Current portion of long-term debt and capital leases" which totals about $2.1 billion. And then there is something called "Long-term debt and capital leases, net of current portion" totalling about $9.7 billion... What's the difference?
Am I thinking about the following correctly?
Bondholders convert at 2.77 share pr 1000$ Bond value. (359.87).
if SP is above 359.87, bondholders still get 2.77 share pr, so TSLA doesn't suffer further dilution.
If Tesla hadn't hedged their convertible debt and SP was above 359.87 they would be paying off debt with shares worth more than 359.
BUT - Tesla hedged the convertible bonds by buying call options at 359.87, allowing them to buy up to 5.6 million shares at 359.87.
So; between at a share price between 359.87 and 512.66 Tesla effectively owns 56.000 contracts of 359.87 call options on their own shares.
As far as I know Tesla hasnt sold the call options off. The Mar15'19 360 Call option is currently trading at 43$.
Is Tesla sitting on a call option position worth ~240m$ right now?
"In connection with the offering of these notes in March 2014, we entered into convertible note hedge transactions whereby we have the option to purchase initially (subject to adjustment for certain specified events) a total of 5.6 million shares of our common stock at a price of $359.87 per share. The total cost of the convertible note hedge transactions was $524.7 million. In addition, we sold warrants whereby the holders of the warrants have the option to purchase initially (subject to adjustment for certain specified events) 2.2 million shares of our common stock at a price of $512.66 per share for the 2019 Notes and 3.3 million shares of our common stock at a price of $560.64 per share for 2021 Notes. We received $338.4 million in total cash proceeds from the sales of these warrants. Similarly, in connection with the issuance of the additional notes in April 2014, we entered into convertible note hedge transactions and paid a total of $78.7 million. In addition, we sold warrants to purchase initially (subject to adjustment for certain specified events) 0.3 million shares of our common stock at a price of $512.66 per share for the 2019 Notes and 0.5 million shares of our common stock at a price of $560.64 per share for the 2021 Notes. We received $50.8 million in total cash proceeds from the sales of these warrants. Taken together, the purchases of the convertible note hedges and the sales of the warrants are intended to reduce potential dilution and/or cash payments from the conversion of these notes and to effectively increase the overall conversion price from $359.87 to $512.66 per share for the 2019 Notes and from $359.87 to $560.64 per share for the 2021 Notes. As these transactions meet certain accounting criteria, the convertible note hedges and warrants are recorded in stockholders’ equity and are not accounted for as derivatives. The net cost incurred in connection with the convertible note hedge and warrant transactions was recorded as a reduction to additional paid-in capital on the consolidated balance sheet."
Bondholders convert at 2.77 share pr 1000$ Bond value. (359.87).
if SP is above 359.87, bondholders still get 2.77 share pr, so TSLA doesn't suffer further dilution.
If Tesla hadn't hedged their convertible debt and SP was above 359.87 they would be paying off debt with shares worth more than 359.
BUT - Tesla hedged the convertible bonds by buying call options at 359.87, allowing them to buy up to 5.6 million shares at 359.87.
So; between at a share price between 359.87 and 512.66 Tesla effectively owns 56.000 contracts of 359.87 call options on their own shares.
As far as I know Tesla hasnt sold the call options off. The Mar15'19 360 Call option is currently trading at 43$.
Is Tesla sitting on a call option position worth ~240m$ right now?
"In connection with the offering of these notes in March 2014, we entered into convertible note hedge transactions whereby we have the option to purchase initially (subject to adjustment for certain specified events) a total of 5.6 million shares of our common stock at a price of $359.87 per share. The total cost of the convertible note hedge transactions was $524.7 million. In addition, we sold warrants whereby the holders of the warrants have the option to purchase initially (subject to adjustment for certain specified events) 2.2 million shares of our common stock at a price of $512.66 per share for the 2019 Notes and 3.3 million shares of our common stock at a price of $560.64 per share for 2021 Notes. We received $338.4 million in total cash proceeds from the sales of these warrants. Similarly, in connection with the issuance of the additional notes in April 2014, we entered into convertible note hedge transactions and paid a total of $78.7 million. In addition, we sold warrants to purchase initially (subject to adjustment for certain specified events) 0.3 million shares of our common stock at a price of $512.66 per share for the 2019 Notes and 0.5 million shares of our common stock at a price of $560.64 per share for the 2021 Notes. We received $50.8 million in total cash proceeds from the sales of these warrants. Taken together, the purchases of the convertible note hedges and the sales of the warrants are intended to reduce potential dilution and/or cash payments from the conversion of these notes and to effectively increase the overall conversion price from $359.87 to $512.66 per share for the 2019 Notes and from $359.87 to $560.64 per share for the 2021 Notes. As these transactions meet certain accounting criteria, the convertible note hedges and warrants are recorded in stockholders’ equity and are not accounted for as derivatives. The net cost incurred in connection with the convertible note hedge and warrant transactions was recorded as a reduction to additional paid-in capital on the consolidated balance sheet."
Toolsmack
Member
Personally, I don’t like the change-up in messaging from the conference call to this news(if proven accurate).
Artful Dodger
"Neko no me"
OT
Cosmic Journey of Elon Musk's Roadster:
Coincidence? I think not.
CH3ERS!
Cosmic Journey of Elon Musk's Roadster:
- Launched onboard Falcon Heavy Feb 6, 2018
- passed within 68.7 M mi of Mars on Jun 10
- crossed Mars orbit in July, 2018
- farthest distance from the Sun (154.7M mi) on Nov. 9
- next close encounter with Earth in 2091
Coincidence? I think not.
CH3ERS!
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EVNow
Well-Known Member
That's not what they are talking about.
It's a question of total float that affects SP. If you increase total float, we can expect some changes in SP.
Instead of 171 M shares, I should use the total float.
In terms of how much of the net assets, it's a complicated calculation to figure out what each share is now worth compared to earlier. The post by JBRR above shows how complicated the whole thing is.
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