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Tesla to raise $1B

ir.tesla.com

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Re: Tesla to raise $1B

#241

Post by nemanja-mit »

slagfart wrote: post #3

Does anyone know the % interest rate on these? It seems to be blanked out. How can financial markets function efficiently when such basic information is suppressed?

Key terms are interest rate (coupon) and conversion premium. These are not printed on preliminary prospectus and will be printed on the final once the pricing is determined. They way this works is that underwriters (big banks listed on the first page) go to the market (long only and hedge fund investors) with a range for coupon and conversion premium. Investors will express interest somewhere in the range and the instrument will be priced tomorrow at close to get the right investors and best pricing for Tesla. We'll see the final terms once the convert is priced tomorrow after close, but qualified investors already have offering ranges.

Generally, converts have much lower interest than straight debt because they offer equity upside to investors once the stock goes above the conversion price. Tesla is high volatility stock, so the convert pricing will be attractive for the company (low coupon / high conversion premium) because that embedded option is valuable to convert investors.

Re: Tesla to raise $1B

#242

Post by querulous »

prostoalex wrote: post #228
kilroy123 wrote: post #83

Earlier quoted context omitted.

I absolutely love Musk and the idea of Telsa. Hell, I would love to get me a Model S, if I could. But I completely agree with you. I think the Model 3 will end up costing way more that $35k, to turn a profit. The timeline will slip and it won't come out until 2018. The whole solar city deal was premature. I think Musk knows this isn't going to work, at least for a while. I think he knows Telsa is going to have a more…

Chevy Bolt is $37,500 MSRP, and GM likely turns a profit on it (once the R&D investment is recouped), are Tesla's unit economics way worse?

chevy has 105 years of experience at manufacturing automobiles and huge volume with suppliers. there's no way tesla has anything close to their unit economics

Re: Tesla to raise $1B

#243

Post by floatrock »

sokoloff wrote: post #80
trevyn wrote: post #66

Earlier quoted context omitted.

Ignoring tax implications is a much, much bigger problem for your argument than ignoring brokerage fees.

Indeed. Even execution slippage is greater than brokerage fees for a reasonable sized round-trip trade at a discount broker.

Sure, the real world inhabited by the pro's is complicated, but the point is when we're first learning the fundamentals, we assume an idealized frictionless plane.

Re: Tesla to raise $1B

#246

Post by chmaynard »

dilemma wrote: post #133

It's correct that if EVs take off, there is going to be a lot of new demand for batteries. It is also correct that as a car manufacturer, owning a battery producing company and selling to the rest of the industry, is a competitive advantage. It is not correct that building both of these companies from scratch, in parallel, is the way to do it. Focus on building cars an become the leader in that, then buy Panasonic or…

I was really hoping that Tesla and Toyota would form a partnership to build and service the Model 3. From a purely business point of view, I think this would have been a huge win for both companies.

Despite the success of the Prius, Toyota made a decision to focus exclusively on fuel cell technology and wasted 10 precious years. They lost that bet, and now they need access to Tesla's superior EV technology to catch up with the competition. Tesla has no experience with the formidable supply chain and production issues involved in building cars on a large scale. This is one of Toyota's great strengths.

Unfortunately, there seems to be some bad blood between Toyota and Tesla management. I suspect this may have prevented consideration of such a partnership.

(Disclaimer: I just decided to sell my modest investment in Tesla stock.)

Re: Tesla to raise $1B

#247

Post by agumonkey »

kilroy123 wrote: post #83
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 absolutely love Musk and the idea of Telsa. Hell, I would love to get me a Model S, if I could. But I completely agree with you. I think the Model 3 will end up costing way more that $35k, to turn a profit. The timeline will slip and it won't come out until 2018. The whole solar city deal was premature. I think Musk knows this isn't going to work, at least for a while. I think he knows Telsa is going to have a more…

I know "shit" but it seems to me that Musk is where he is by being somehow very careful in his company evolution. Every step was bold, but just enough so the market would gain trust for the next bold move that would look less risky than the previous ones. Seems like he's bending the curve a bit higher this time. Spreading thin ?

Re: Tesla to raise $1B

#248

Post by IanCal »

danm07 wrote: post #197
Cookingboy wrote: post #14

Earlier quoted context omitted.

Well the market can be terribly wrong on many companies in the long run, both undervaluing great companies and overvaluing terrible companies. Tesla's vision is for the next 20 years, not the last 5. Historical performance is also not an indicator of future performance. Everyday I'm holding onto the shares is the same as if I made the decision to buy that many shares on that day. If anything the fantastic return woul…

> Everyday I'm holding onto the shares is the same as if I made the decision to buy that many shares on that day While I'm not a banker, I find with this method looking at investments highly disagreeable. The price of the stock at the time of purchase is the projected future profits discounted to present day. In other words, it is the fundamental value of the firm, which is invariant of its day-to-day fluctuations. I…

Perhaps you're putting too much emphasis on the "every day" part. The key idea of evaluating whether the shares are worth it now and not just when you bought them is important, to me.

> I don't see how any good can be gained from envisaging a purchase price other than your lock-in price.

If I have a thing valued much higher than I believe it is worth, surely the logical thing for me to do is sell and buy something else that is valued lower than I believe it is worth. The price I paid for it is completely irrelevant (except, importantly, when it comes to taxes but this may not be an issue, much less relevant for many in the UK).

TSLA is ~$256. If I only think it would be worth buying at $100, then why would I keep the ones I own? The purchase price is a sunk cost.

Re: Tesla to raise $1B

#249

Post by aidenn0 »

agumonkey wrote: post #247
kilroy123 wrote: post #83

Earlier quoted context omitted.

I absolutely love Musk and the idea of Telsa. Hell, I would love to get me a Model S, if I could. But I completely agree with you. I think the Model 3 will end up costing way more that $35k, to turn a profit. The timeline will slip and it won't come out until 2018. The whole solar city deal was premature. I think Musk knows this isn't going to work, at least for a while. I think he knows Telsa is going to have a more…

I know "shit" but it seems to me that Musk is where he is by being somehow very careful in his company evolution. Every step was bold, but just enough so the market would gain trust for the next bold move that would look less risky than the previous ones. Seems like he's bending the curve a bit higher this time. Spreading thin ?

He's also pretty much every product released had its ship-date slip from his initial announcement.

Re: Tesla to raise $1B

#250

Post by aidenn0 »

danm07 wrote: post #197
Cookingboy wrote: post #14

Earlier quoted context omitted.

Well the market can be terribly wrong on many companies in the long run, both undervaluing great companies and overvaluing terrible companies. Tesla's vision is for the next 20 years, not the last 5. Historical performance is also not an indicator of future performance. Everyday I'm holding onto the shares is the same as if I made the decision to buy that many shares on that day. If anything the fantastic return woul…

> Everyday I'm holding onto the shares is the same as if I made the decision to buy that many shares on that day While I'm not a banker, I find with this method looking at investments highly disagreeable. The price of the stock at the time of purchase is the projected future profits discounted to present day. In other words, it is the fundamental value of the firm, which is invariant of its day-to-day fluctuations. I…

If company X's price is currently $100, but it's projected future profits discounted to the present day is $90, then why wouldn't you sell, regardless of the purchase price?
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