The big surprise here isn't that Tesla was doing an offering - it was Goldman did a huge research note 24 hours before the offering while actually participating in said offering.<p>Super bad form and just goes to show the community- don't trust investment bankers. Such bad form.
Well, $1.4 billion for Tesla, $0.6 billion for Musk personally, and an option for Goldman Sachs to get $0.21 billion.[1] Tesla stock is down in after-hours trading, but that doesn't mean much. If the stock is down significantly at the close tomorrow, the market didn't like this.<p>It's a legit offering. The company intends to build a big factory and make stuff. Real capital assets will be bought with that money. It's not to sell stuff at a loss to gain market share in hopes of raising prices later. (Looking at you, Uber.)<p>Tesla just hired Audi's head of manufacturing, Peter Hochholdinger. About a week ago, the previous two top people in manufacturing quit, right after Musk announced he wanted the production line running two years sooner. Maybe Hochholdinger can do it.<p>[1] <a href="https://www.sec.gov/Archives/edgar/data/1318605/000119312516594471/d185970d424b5.htm" rel="nofollow">https://www.sec.gov/Archives/edgar/data/1318605/000119312516...</a>
Why do people keep spouting this nonsense that Tesla is losing money on EVERY car? They make money on every car otherwise they wouldn't be selling any cars. The lose money due to their high R&D.
This is not a surprise; there's an old saw that I think I first read in a Buffet annual report. It says that financing tends to alternate forms for companies in terms of what makes sense: debt -> equity -> debt -> equity.<p>Equity offering seems likely to be much cheaper than debt right now; Tesla has great mindshare among consumers, and lots of doubters on the professional investor side.
<p><pre><code> echo "Tesla to offer $1.4 billion shares, remaining to be sold by Elon Musk.
Musk is exercising options to buy 5.5m shares and will boost overall holdings
on net basis. Developing... " | wc
1 30 176
</code></pre>
News articles and tweets are converging at an alarming rate.
It's pretty obvious at this point that Tesla's number one product is their stock. Which makes it no different from a number of other high fliers.<p>At first they were an innovative car company. Then the stock price shot well above the level sustainable by an electric car company. Elon realized this, and then builds the Giga factory. We're not just a car company, we're a power company!<p>Now they are raising more equity off of an inflated stock price. I'd stay away from this one.<p>Not a total hater, Tesla cars are great, but one of these day's Elon's moon shots and obsession with the stock price will catch up with him (he'll still be rich) and his investors (they may be significantly less rich).
It's neither here nor there, but I feel like Bugs Bunny in "High Diving Hare", and Musk just raised the platform another 50 feet:<p><a href="https://youtu.be/6eZaVdFbo6A?t=145" rel="nofollow">https://youtu.be/6eZaVdFbo6A?t=145</a>
From the press release, it appears that the capital raise is "only" $1.4 billion -- the remainder is Elon Musk selling shares to cover his tax liability for simultaneously exercising options from 2009. Hopefully 1.4 billion is enough.
Tesla has a really great business. They're not just cars, they're batteries. Their home battery for storing solar energy is a huge deal at least in terms of future cash flows. Also, they're a white label supplier of batteries to companies like Toyota and Mercedes. Anyway--new long term TSLA shareholder here. Bought in at $205.