Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Tesla to raise $1B

ir.tesla.com

Post reply on HN
Print view View original

41–50 of 334 posts

Re: Tesla to raise $1B

#41

Post by tma-1 »

corbett3000 wrote: post #9
Cookingboy wrote: post #6

As an investor of Tesla who bought into Elon's vision I've been getting more and more nervous about how the company is actually run at this point. A modern car company is as much of a production and supply chain company as it's a product and tech company. I get the feeling that due to Tesla being cutting edge in the tech department it led to all the supply chain/production problems being treated as if they are speed…

You're concerned with a 23% YTD return on the stock and a 600% return over 5 years? The market has a way of signaling if a company is totally screwed up. Looks like it isn't.

VRX was worth $257 in 2015, now it's worth $11.

Re: Tesla to raise $1B

#42

Post by arzt »

jeffwass wrote: post #16
salimmadjd wrote: post #5

Tesla is basically taking on a loan in form of a convertible notes. probably much smarter to distribute their lender among multiple entities than one giant bank that would have leverage on them. Also, it looks like Tesla would use a portion of the money to inflate their share prices via a small buyback. The after market trading so far make this strategy look successful. So at the end of a day: Tesla is raising capita…

You've contradicted yourself in the two quotes below. "Tesla is basically taking on a loan in form of a convertible notes." "So at the end of a day: Tesla is raising capital without diluting their shareholders and reducing their share values" Convertible debt is in fact dilutive. It's even specifically accounted for when calculating Diluted Earnings per Share : http://www.investopedia.com/terms/d/dilutedeps.asp

Sort of, but not really...the FASB has said you can treat the underlying shares as non-dilutive if the stock price isn't above the conversion price (this is called "net share settlement"). So basically, while outstanding, the debt acts like debt for accounting purposes until the stock price is above the conversion price. When it goes above the conversion price, the you treat those incremental shares as dilutive. Additionally TSLA is putting what's called a bond hedge (or call spread) on top of this, which limits dilution over and above an even higher stock price.

Pretty sweet deal if your stock price doesn't go up and you only have to pay minimal interest.

Here's an example that lays out a similar structure and accounting treatment: https://www.sec.gov/Archives/edgar/data/1084961/000119312513...

Re: Tesla to raise $1B

#44

Post by wlesieutre »

Cookingboy wrote: post #21
baq wrote: post #11

Earlier quoted context omitted.

the one problem with your post is that you think it's still a car company.

Well judging by the percentage of their revenue from cars at this point they are undeniably a car company. Vision statements are predictive instead of descriptive. Apple can have a vision of building cars in the future but it doesn't change the fact that they are a consumer electronics company today . Vision is cheap, execution is where the money is at.

People aren't buying Apple stock because of what the company is today, they're buying it because of where they think Apple will be in the future relative to what they are now. In Apple's case, that future version might still be a consumer electronics company. Just one with (hopefully) innovative new products and a higher share price than you're buying in for.

Given the Tesla's SolarCity merge, the associated solar shingles project, the battery gigafactory, the PowerWall, and their grid energy storage projects, I wouldn't invest in Tesla today thinking "Tesla is a car company, and 5 years from now they'll be a bigger car company with new car models!" in the same way that I'd approach Apple.

Re: Tesla to raise $1B

#45

Post by someone79879 »

Cookingboy wrote: post #6

As an investor of Tesla who bought into Elon's vision I've been getting more and more nervous about how the company is actually run at this point. A modern car company is as much of a production and supply chain company as it's a product and tech company. I get the feeling that due to Tesla being cutting edge in the tech department it led to all the supply chain/production problems being treated as if they are speed…

I have two tracks of thought here:

1. You are an investor who is genuinely upset 2. You are trying to short the stock by spreading FUD

I can take your word for it that you're in the first bucket but I have doubt.

Re: Tesla to raise $1B

#46

Post by c0nfused »

CptJamesCook wrote: post #35

I just picked up my Model X after a week in the shop. They weren't able to finish all of the work, because "we are busy this time of year." They told me to bring it back in April. In about a year of ownership, this is the 3rd time I've lost the car for about a week. I probably should have brought it to the shop 3-4 other times, but I let the issues build up. They've had to replace all sorts of parts on my car, includ…

If it makes you feel any better, This seems to actually be fairly common in the automobile market for new model cars to have teething issues like this.

I bought a new model mini cooper a few years back right after f56 came out and ran into issues like: USB port would not charge a Verizon smartphone, Car would occasionally stall and would need to be put in park to start again, Replaced rear seat, air bags.

It sucks, but it seems like the sort of last minute post release bug fixing that happens all over in software.

Re: Tesla to raise $1B

#47

Post by idiot_stick »

salimmadjd wrote: post #5

Tesla is basically taking on a loan in form of a convertible notes. probably much smarter to distribute their lender among multiple entities than one giant bank that would have leverage on them. Also, it looks like Tesla would use a portion of the money to inflate their share prices via a small buyback. The after market trading so far make this strategy look successful. So at the end of a day: Tesla is raising capita…

>probably much smarter to distribute their lender among multiple entities than one giant bank that would have leverage on them.

A less charitable reading is that no single lender wanted to write the debt. A billion isn't substantial...

Re: Tesla to raise $1B

#48

Post by ricardobeat »

CptJamesCook wrote: post #35

I just picked up my Model X after a week in the shop. They weren't able to finish all of the work, because "we are busy this time of year." They told me to bring it back in April. In about a year of ownership, this is the 3rd time I've lost the car for about a week. I probably should have brought it to the shop 3-4 other times, but I let the issues build up. They've had to replace all sorts of parts on my car, includ…

> The hood opened into a ceiling

Is that a Model X issue? What would you expect to happen in another car?

Re: Tesla to raise $1B

#49

Post by hackuser »

How much of Tesla's prospects are due not to free market competition, but Elon Musk lending his credibility to Trump? What happens to his competition, who do compete in the market and take a principled stand against Trump? Is Musk still supporting Trump?

I just spent some time doing a little research (below) and as far as I can tell, the answer to the questions seem unsettling, though I couldn't find many great, current sources in a short time. I'd be interested in serious discussion and information; let's skip the partisan hackery - there's so much out there that more won't provide any marginal revenue!

.

----

.

Musk's support for Trump:

* Billboard near Elon Musk's Tesla factory asks him to 'dump Trump'

http://abcnews.go.com/Politics/billboard-elon-musks-tesla-fa...

* Elon Musk, other business leaders to talk infrastructure with Trump Wednesday

http://money.cnn.com/2017/03/08/news/companies/elon-musk-don...

Musk, who is a member of both Trump's economic advisory council and manufacturing council

* Elon Musk: Rex Tillerson could be an 'excellent' secretary of state [from January]

http://www.businessinsider.com/elon-musk-says-rex-tillerson-...

Note that Tillerson was previously CEO of Exxon-Mobil, a captain of the carbon industry.

.

----

.

How his businesses benefit from the relationship with Trump:

Don't forget the strong appearance that Trump is selling access. What will happen to the space exploration goals of Jeff Bezos, owner of the Washington Post, for example, or other Musk competitors? Note that Musk's actions puts pressure on them, too, to support Trump or risk serious damage to their businesses. And also it seriously disrupts the free market to have it depend on personal relationships with the President rather than merit of the companies.

* Musk’s Surprise Rapport With Trump Means 40% Rally for Tesla [from January]

https://www.bloomberg.com/news/articles/2017-01-26/musk-s-su...

* Elon Musk’s Trump Alliance Indicates Great Things for Tesla Stock

http://www.profitconfidential.com/stock/elon-musk-trump-alli...

* UBS analyst says he can't understand why Tesla shares are up so much this year, sell the stock

https://www.cnbc.com/2017/02/16/ubs-analyst-says-he-cant-und...

"We struggle to understand the run-up, particular as Q4 deliveries missed, though positive spin on the Musk-Trump relationship, reconfirmed Model 3 launch timing, and expectations of new reveals (including more autonomous features) are likely factors," analyst Colin Langan wrote in a note to clients Wednesday.

* UBS (Basically): Tesla’s Path To Profitability Now Dependent On Musk-Trump Bromance [a one-sided editorial]

http://dealbreaker.com/2017/03/teslas-profitability-musk-tru...

UBS notes, “there has been discussion that Trump’s infrastructure project may involve federal subsidies for a nationwide EV charging corridor, which could reduce the cost burden.”

* Elon Musk's surprising secret weapon: Trump? [From January]

* Elon Musk Has Trump’s Ear, and Wall Street Takes Note

http://money.cnn.com/2017/01/20/technology/elon-musk-trump/

https://www.nytimes.com/2017/01/26/business/elon-musk-donald...

[Both re: Morgan Stanley investor advice:]

"Elon Musk has an important line of communication to Donald Trump through his role as a strategic advisor to the President-elect," Adam Jonas, an analyst with Morgan Stanley, wrote in an investor note Thursday. / "We believe this level of coordination with the new administration could actually evolve into greater strategic value than with the prior administration," Jonas added.

Mr. Jonas said that the "strategic relationship between Tesla leadership and the new administration is an important development" in his decision to upgrade Tesla stock.

.

----

.

And some background:

* Elon Musk Is Betting Big on Donald Trump

https://www.theatlantic.com/technology/archive/2017/02/elon-...

Re: Tesla to raise $1B

#50

Post by mikeash »

CptJamesCook wrote: post #35

I just picked up my Model X after a week in the shop. They weren't able to finish all of the work, because "we are busy this time of year." They told me to bring it back in April. In about a year of ownership, this is the 3rd time I've lost the car for about a week. I probably should have brought it to the shop 3-4 other times, but I let the issues build up. They've had to replace all sorts of parts on my car, includ…

They really overdid it with the X. Lots of cool stuff, but kind of impractical.

I have an S, which I think they got just about right. I actually just drove it back from the service center, but the problems I've had have been fairly minor and the sort of thing you might expect from any car.

I'm hoping that the strict cost target for the 3 will mean that it's simpler and and more reliable. Certainly there won't be crazy-ass doors to go wrong. I agree that the 3 must be a lot better for the company to survive.

By the way, when you say the hood opened into a ceiling, do you mean the tailgate? The hood is still manually operated, unless I missed some news.

Post reply on HN