TSLA Market Action: 2018 Investor Roundtable

[gora321]

This is the sample how you stand up for your friend.
This is the friend I would like to have.
Larry, my respect!

Bloomberg - Are you a robot?

ps. can't believe that Bloomberg published this.

 

[EarlyAdopter]

No, he is buying $20 million on new shares directly from Tesla to cover the cost of their SEC fine. This is dilutive.

Tesla paying the fine from their cash would not be dilutive, but would reduce cash on hand.

Tesla paying the fine from their cash would reduce total stockholders' equity, i.e. the value of the company per share. This is dilutive, just on the other side of the equation.

Do you have a reference handy stating that Elon is buying a private placement? Would seem easier to just buy on the open market. End result is the same, just a matter on which side of the shareholders equity/shares outstanding equation you mark the dilution.

 

[Drumheller]

I did some rough calculation. I think the free charging worth much more than $5k in the long run. I plan to spend one year and use FSD to travel around the nation, I want to see every places. It's an item on my bucket list. The supercharging cost in that one trip could worth $10k. Also very valuable when the car is enlisted for ride sharing on Tesla Network.

OFF TOPIC POST:

I've done several road trips in my Model S. I think about 35,000 miles worth of road trips over the past 2.5 years around the USA. The longest one was 2.5 months of living in the car and driving around the USA. 15,300 miles. Almost all of my fuel was from superchargers. I have free supercharging on my car (CPO with it already in place). Saved me quite a bit of money on the trip. Definitely recommend the trip. I built a bed in the car and saved some money on hotels using that, too.

 

[sundaymorning]

Thanks for the link, but the 2:21 mark on this two and a half hour vid isn't it, Larry doesn't appear until the one hour mark. Any chance of updating where he gives his Tesla comments? Thanks.

2 hour 21 minutes

 

[MP3Mike]

Do you have a reference handy stating that Elon is buying a private placement? Would seem easier to just buy on the open market. End result is the same, just a matter on which side of the shareholders equity/shares outstanding equation you mark the dilution.

No it wouldn't be the same. Elon buying on the open market would not reimburse Tesla anything, they would have $20 million less after paying the fine. By buying new stock Tesla gets $20 million of income to offset their SEC payment. By issuing new stock each share of stock has less equity for anything Tesla earns in the future, if Elon bought on the open market and Tesla paid out of their own money it would be one-time reduction of equity. Big difference.

This comes from the 10/16 8-K filing: http://ir.tesla.com/static-files/73f2d694-2b20-43f9-a998-b1f296933cb9

Separate and apart from the settlement, Elon has notified Tesla that he intends to purchase from Tesla, and Tesla expects that it will issue and sell to Elon, $20 million of Tesla’s common stock during the next open trading window at the then-current market price.

 

[ggr]

Shouldn't be dilutive. He's buying $20M in shares personally, on the open market, to counter the miniscule dilution created by Tesla corporation having to pay out $20M of shareholder's money to the SEC. If anything, it should drive the stock up a little bit as a decent number of shares get taken out of circulation.

No, he is buying newly issued shares so that Tesla (not some random seller) gets the money. But it isn't dilutive, because the value of the company goes up the same amount as the newly issued shares represent.

 

[MP3Mike]

No, he is buying newly issued shares so that Tesla (not some random seller) gets the money. But it isn't dilutive, because the value of the company goes up the same amount as the newly issued shares represent.

But it dilutes all future earnings doesn't it?

 

[ThereAre4Cars]

But it dilutes all future earnings doesn't it?

Anyone invested in Tesla probably thinks this it is a bad deal for shareholders. Anyone who thinks Tesla needs all the cash it can get thinks it's a good deal.

 

[ggr]

But it dilutes all future earnings doesn't it?

Not really. The theory is that the money is put to good use expanding the business, or reducing debt, or something like that, so the total return to the company will be larger, then spread out over a few more shares, and it should be either positive or a wash if the company was worth investing in. Anyway, the dilution is 0.036%, which is $0.11 cents per share at current stock price, so even if the money was flushed down the toilet, who cares?

 

[Xpert]

Fred Lambert has really gone off the rails lately. If he’d bought a car through a dealer he’d have been offered a different deal to someone who bought the same car on the same day in another town. At some point Tesla’s corporate strategy needs to mature rather than caving at the first sign of whinging and giving away shareholder value to customers who received exactly what they paid for.

This also bothers me as a shareholder. Tesla needs to consider their pricing strategy more carefully to avoid situations like this. They could also give tesla credit to buy something else/ next car instead of refund to reduce the impact and it would still be fair.

Any guestimate how much this would cost tesla? I’d imagine most people who bought the upgrade package will request a $5k refund, except those few who take roadtrips or long distance commute.
If 5k cars = $25M. 10k Cars = $50M easily.

Fred just cost Tesla a *sugar* load of cash, and just showed he is a Greedy/angry bastard. Could have taken this with a different approach first if he cares about the company.

 

[oneday]

Anyone invested in Tesla probably thinks this it is a bad deal for shareholders. Anyone who thinks Tesla needs all the cash it can get thinks it's a good deal.

$20million dilution is smaller than mouse nuts. And the cash is going to SEC unfortunately.

 

[M3Rider]

He should give choice:
* 5k refund & no supercharging
* FSD
* $5k credit towards next car

I don't believe he should. That's his good will. Whomever signed the contract and was willing to pay more has no right for a refund.
Keep in mind all these refunds will be coming out of Q4 profit and somebody's SP may not do so well as a result.

 

[oneday]

This also bothers me as a shareholder. Tesla needs to consider their pricing strategy more carefully to avoid situations like this. They could also give tesla credit to buy something else/ next car instead of refund to reduce the impact and it would still be fair.

Any guestimate how much this would cost tesla? I’d imagine most people who bought the upgrade package will request a $5k refund, except those few who take roadtrips or long distance commute.
If 5k cars = $25M. 10k Cars = $50M easily.

Fred just cost Tesla a *sugar* load of cash, and just showed he is a Greedy/angry bastard. Could have taken this with a different approach first if he cares about the company.

Loyalty begets loyalty. If he is making it right by customers that good will pays dividends. Fred didn’t need to sound like such a whiny b. But Elon is making a good move here.

 

[EngRyan]

Anyone invested in Tesla probably thinks this it is a bad deal for shareholders. Anyone who thinks Tesla needs all the cash it can get thinks it's a good deal.

With the closing price of 330.90, $20 mil of shares is 60,441 shares. With outstanding shares at 170.59 million that's 0.035% or about 12 cents. You could use float but Elon will sit on these anyways. Soooo really, it's meaningless. But $20 mil free cash isn't anything to shake a finger at. And honestly it's more of a principle of Elon trying to not cost Tesla anything for his Tweeting. As best he can anyways.

 

[Oil4AsphaultOnly]

OFF TOPIC POST:

I've done several road trips in my Model S. I think about 35,000 miles worth of road trips over the past 2.5 years around the USA. The longest one was 2.5 months of living in the car and driving around the USA. 15,300 miles. Almost all of my fuel was from superchargers. I have free supercharging on my car (CPO with it already in place). Saved me quite a bit of money on the trip. Definitely recommend the trip. I built a bed in the car and saved some money on hotels using that, too.

at 3miles / kwh, you used 5,100 kwh for those trips. At the current california supercharging price of 26c / kwh, you saved $1326!

yeah free supercharging is definitely more valuable to you!

 

[dqd88]

I don't believe he should. That's his good will. Whomever signed the contract and was willing to pay more has no right for a refund.
Keep in mind all these refunds will be coming out of Q4 profit and somebody's SP may not do so well as a result.

But there is a cost to supercharging, so in the long run it may be the case that the company comes out ahead. idk

 

[MXWing]

This also bothers me as a shareholder. Tesla needs to consider their pricing strategy more carefully to avoid situations like this. They could also give tesla credit to buy something else/ next car instead of refund to reduce the impact and it would still be fair.

Any guestimate how much this would cost tesla? I’d imagine most people who bought the upgrade package will request a $5k refund, except those few who take roadtrips or long distance commute.
If 5k cars = $25M. 10k Cars = $50M easily.

Fred just cost Tesla a *sugar* load of cash, and just showed he is a Greedy/angry bastard. Could have taken this with a different approach first if he cares about the company.

I’m not Fred’s biggest fan but he was in the right here. He basically represented jilted car owners. Whether the car owners were jilted or not is irrelevant.

Perception is reality.

Elon is not a bad guy and I don’t blame him. Nor Fred.

The persons I blame is the persons who didn’t run focus groups to gauge response and didn’t stand up to Elon even if he wants to do this.

Hell if I were Tesla’s web master I would have said no to the change and explain why.

 

[dqd88]

But it dilutes all future earnings doesn't it?

it's an immaterial amount.

 

[dqd88]

I’m not Fred’s biggest fan but he was in the right here. He basically represented jilted car owners. Whether the car owners were jilted or not is irrelevant.

Perception is reality.

Elon is not a bad guy and I don’t blame him. Nor Fred.

The persons I blame is the persons who didn’t run focus groups to gauge response and didn’t stand up to Elon even if he wants to do this.

Hell if I were Tesla’s web master I would have said no to the change and explain why.

He should of stairstepped the price down over time in increments of $2k or $2.5k to soften the change. $5k is a lot; and why does it need to be in such big round numbers

 

[Gavyne]

I’m not Fred’s biggest fan but he was in the right here. He basically represented jilted car owners. Whether the car owners were jilted or not is irrelevant.

He represented himself, he paid for the $5k, you could tell he took it personal with the amount of personal rants he put into the article. This isn't the first time he has done it. And he literally just lead the pitchfork march using his weight as the editor of a popular site, forced Elon into a corner.

Tesla did something wonderful to attract more people into the Tesla family, and to get more EV's out there. Remember the mission? There could've been an easier way for Fred to reach out to Elon to discuss it. Instead he used his celebrity status and now, Tesla is going to make less money as a result. Does anybody here really want that? I don't think so.

ps earlier today he repeated WSJ's article on FBI probes, the same thing businessinsiders and cnbc did. Sorry but the guy isn't that innocent. I won't get into the clickbait article titles he has been using either, such as "Tesla Model 3 weekly production slightly down, overall production at close to 25,000 cars this quarter". Oh did you know Tesla only made 25k this quarter? No, what he meant was Tesla made 25k cars so far this month. But, clickbait benefits him and his publication.