Tesla To Raise Over $1.15 Billion To Help Offset Risk For Model 3 Production (techcrunch.com) 86
Tesla is looking to raise a total of around $1.15 billion from stock and convertible senior notes as a way to help "further reduce any risks" that it'll incur as it scales its business to handle its aggressive Model 3 production schedule, the company said. From a report: Tesla's decision to pad out its balance sheet with more capital was anticipated by many analysts, and a fair number of Wall Street watchers actually thought Tesla would seek more to help it grow based on recent comments made by Tesla CEO Elon Musk. The Model 3 is set to begin full production this year, with pre-production begun in February with a temporary production line pause to help get processes at its Fremont factory ready for the new vehicle. The split of the new funding efforts will see Tesla pursue $250 million in common stock offering, with $750 million raised via convertible notes due in 2022. Elon Musk himself will personally contribute by buying $25 million in Tesla stock.
Re:Tesla To Claim $1.15 Billion Subsidy As Profit (Score:5, Informative)
I don't think you understand what raising capital means.
Tesla is selling stock, and the market is buying it. Capital rounds are almost unavoidable in large, rapidly growing businesses. Investors convert their ownership from a larger share in a smaller company to a (slightly) smaller share in a company that they feel will become much larger because of it. The money gained from doing so funds the scaleup.
It has nothing in any way, shape or form to do with "subsidy". Capital rounds are capitalism in its purest form.
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When you run your fingers through his hair, do any of the plugs come out?
Re: Tesla To Claim $1.15 Billion Subsidy As Profit (Score:1)
Teslas doesn't make cars, they make bullshit (Score:1)
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Their financial accounting is creative to say the least, even by normal standards these da
Re:Teslas doesn't make cars, they make bullshit (Score:5, Insightful)
They couldn't do the model 3 because batteries were still too expensive. It was only possible now.... which is why they did it now.
When the batteries cost $45,000 you can't make a $35,000 car.
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Preorders do not equal sales. Those orders right now are contingent on a particular delivery date and a particular delivery price. I believe people will be flexible on delivery date to a point, but price they may not be. And so far, historically Tesla has missed their projected price by about $30K consistently. And there may be a lot willing to drop $35K, but I'm willing to bet that the number willing to drop $65K is significantly smaller.
And if you think the gigafactory is going to fix things, remember
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But, as a fairly diversified company at this point, I don't think the risk is a deal-killer for the stock or company. While they likely paid too much for Solar City, it is a reasonable strategy and I am happy they are more integrated now. My only real concern is that th
Re:Teslas doesn't make cars, they make bullshit (Score:5, Informative)
(Citation Needed)
The Roadster was promised at $100k. This was based on Eberhard's budgeting, not Musk's. During the development, the board (including Musk) eventually came to realize the degree to which Eberhard had fudged the numbers and all of the problems he had gotten the company into (penalties for unmeetable contracts, a stupid choice of gearbox supplier, etc), and ultimately he was fired. Their estimate at the time was that the car would end up at over $120k. However, with a lot of good decisions, such as getting customer buy-in to (rather than starting over on the gearbox) switch it from a two-gear to a one-gear with a more powerful drivetrain to achieve the same accel, they brought the price down to $109k at release.
The Model S was initially promised at $57,4k for 40kWh, $67,4k for 60kWh, and $84,4k for 85kWh. The price today? $59,9k for 40kWh, $68k for for 60kWh, and $79,9k for 85kWh.
The Model X was the same story - came in right at around the price estimate.
Where you got this "Tesla has missed their projected price by about $30K consistently" is beyond me.
Wow, I'm sure Tesla totally didn't think about ensuring reliable supplies for their raw materials. I bet that totally never crossed their mind. Thank God we have Anonymous Coward here to point out their mistakes to them!
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The Roadster was promised at $100k
No, base price was supposed to be $89,000
From Musk's blog post of Aug 2nd, 2006; the Secret Tesla Motors Master Plan - https://www.tesla.com/en_CA/bl... [tesla.com]
"Without giving away too much, I can say that the second model will be a sporty four door family car at roughly half the $89k price point of the Tesla Roadster and the third model will be even more affordable"
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US prices. [wikipedia.org]
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Where exactly are you finding a 40kW Model S on the website? Because you're comparing to the price I listed for the 40kWh, but the page you linked starts at the 60kWh. And the page you linked lists the baseline 60kW model for... wait for it... $68k. The price I listed for the 60kWh. 73k is for the 60kWh AWD, which is faster than the baseline, RWD 60kWh model S.
Pay attention and try to keep up.
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A person who can't manage to pay attention to what battery pack models they're comparing the price on, calling the person they're talking with who quoted them accurately a dumbass?
Tesla did meet the price (within a couple percent) on the 40 kWh pack. The fact that there was low demand for it is irrelevant.
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Tesla did meet the price (within a couple percent) on the 40 kWh pack. The fact that there was low demand for it is irrelevant.
They did better than that. All the orders for Model S40 were fulfilled with software-limited 60 kWh battery packs. If the owners choose to not unlock the full capacity, those packs will last a long time. And the cars have the same performance as the S60s did at the time and are grandfathered for unlimiited Supercharging.
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They made promises for specific battery pack levels and they delivered on all of them. People stopped buying one pack size, so they stopped selling it. That has no bearing on Tesla's track record of meeting their promises, because the promises in each case were relative to specific battery pack levels.
And the fact that you keep saying "$73k" just makes you look like an idiot, because you keep citing the upgraded 60D (aka, the performance version of the 60 kWh-pack model S) instead of the base 60, which is $
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I'm not sure what you want here. Are you saying that Tesla should have kept selling a vehicle that people weren't buying, just to prove to you.... what exactly?
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Eberhard ... all of the problems he had gotten the company into (penalties for unmeetable contracts, a stupid choice of gearbox supplier, etc), and ultimately he was fired. ... However, with a lot of good decisions, such as getting customer buy-in to (rather than starting over on the gearbox) switch it from a two-gear to a one-gear with a more powerful drivetrain to achieve the same accel, they brought the price down to $109k at release.
What you neglect to say is that Elon was the one who pushed them into a
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All the "market" oriented people have always claimed Elon Musk's companies are going to fail. Every one of them has been wrong (and confused about it) to date.
Not a "fanboi", just an observer.
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This because there are so many of you fools out there waving dollas at your hero. Eventually he will run out of other peoples money. I read that musk is putting up $13.5 million himself. LOL! He's is worth $13 _billion_ on paper.
Atleast he's doing something. Atleast he might succeed. What are you doing for the world, dear AC?
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Making money hand over fist investing in viable companies, and shorting non-viable ones ;)
That would be doing something for *you* then.
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How exactly is running a Ponzi scheme subsidised by taxpayer money doing something for the world?
We call that government
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Elon Musk himself will personally contribute by buying $25 million in Tesla stock.
After dilution of course.
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It's been institutional investors buying most of Tesla's stock thusfar.
And making a mint on it, it should be added.
By the way, Anonymous Stopped Clock, when are you finally going to actually be right about something concerning Tesla? Anybody else remember TTAC's "Tesla Death Watch" series? They last updated it in 2008. It's hilarious irony now. ;)
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It's been stupid dumbass moron like me buying most of Tesla's stock thus far.
Fixed that for you.
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One of his companies successfully launched a communications satellite to geosynchronous orbit last night. That company would have been profitable last year if it weren't for a mishap that grounded the fleet, though they returned to flight in record time. Barring any more mishaps, they will be profitable this year. The company in question has a full launch manifest because of their ability to launch satellites for much cheaper than any of their competitors, and once they start reflying landed boosters, costs
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The touchdown was at quite a low velocity. Don't know what you are talking about. Plus most of the cost in a vehicle is the engines, not the propellant tanks or the aeroshell.
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They just launched one of the reusable rockets last night so they seem to have overcome any issues.
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The one last night wasn't a reuse, though the first reused booster will be either the next one or the one after, I believe.
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The reusable part is really just icing on the cake and only a necessity for taking SpaceX beyond just being a good take-your-satellites-to-orbit company. Even without reuse, they are still pretty successful in the satellite launch business. As far as fundamental problems, lets talk after the SES-10 launch scheduled for later this month.
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It's not really wise to bet against Musk. He does make outrageous claims and plans but he usually delivers (mostly late).
Lots of hate for his success but that is not an investment strategy.
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Meh. It's a mix of finance and politics... buying a bit of this stock is supporting Musk, and I like what he's doing.
Yes, I'm making a rich guy richer (when he's structured things so he's not really footing the bill or all that much risk), but you can also look at it as an investment in the future instead of direct financial profit.
You know, a future with less expensive space travel, a better power grid and electric transportation, maybe even the stupid hyperloop (though I don't really buy the hyperloop ar
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Good thing you posted as AC, don't want your name associated with not knowing a thing about stocks.
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BTW, now $7 and change...
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Right. Institutional investors are clueless about money. Slashdot ACs who know nothing about Tesla's internal figures and can't even bother to keep up on the published figures are the real financial geniuses. I'm sure you made that post from a yacht moored right offshore of your private island, didn't you?
You sound so much like the endless stream of people on Slashdot making fun of anyone who invested in Amazon because "they never turned a profit" - completely ignoring that businesses undergoing rapid scale
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Right. Institutional investors are clueless about money.
No dumbass morons like you are fucking clueless period.
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You sound so much like the endless stream of people on Slashdot making fun of anyone who invested in Amazon because "they never turned a profit" - completely ignoring that businesses undergoing rapid scaleup by design don't return profits, and quite the opposite need regular capital rounds to pay for said scaleup.
A company has to make a profit at some time though. If its discounted future cashflows aren't positive, the investment has a negative value.
Here we go. The Musk-hating posse on this site (Score:1)
will be gleefully happy.
When Apple issues corporate bonds despite having $200 Billion in the bank, nobody bats an eyelid. When a business that is in a relatively early state of growth and wants to fund expansion decides to borrow money (Tesla), suddenly we have people accusing Musk of being a freeloader and a charlatan, whose businesses must be on the verge of collapse.
Almost all companies who intend to grow quickly borrow money to do so, especially with interest rates being historically low. It would be ba
Stock is Up (Score:2)
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It was already priced in, as it had been expected by analysts - and the amount is smaller than had been expected.
Re:Stock is Up (Score:4, Informative)
Markets factor in things that might affect the stock before official announcements, based on what they expect the announcement to indicate. The stock is up because the capital round is smaller than the market had thought would be necessary.
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The real issue is if Tesla has a viable business model and if its current valuation can be justified. Many Tesla naysayers, and I am one, believe the answer is "No."
Normalize interest rates and Tesla will start have to start earning serious operating capital or be in the dot-com model of "we'll make it up on volume."
As with most naysayers, you're obviously completely clueless about anything and everything to do with finances. If you did, you'd have read Tesla's financial statements and know they make a profit on every single vehicle sold. As in "sale price - (cost of materials + cost of labor) = a positive number." They most definitely can "make it up on volume" eventually. That's the whole point of this funding round—ramping up their production capacity so they can produce higher volumes. Higher volumes of
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they make a profit on every single vehicle sold. As in "sale price - (cost of materials + cost of labor) = a positive number."
Pretty much all companies except for basket cases on the verge of bankruptcy make a gross profit.
It's the net profit you need to look at.
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