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I think they story that they need a 'massive infusion of cash' is simply false. I have no idea why anybody would believe that. It is not in accordance with thei

by nickik 8y ago

I think they story that they need a 'massive infusion of cash' is simply false. I have no idea why anybody would believe that. It is not in accordance with their own guidance or what we know from their production numbers and cashflow numbers.

jandrese 8y ago
Basically Musk is tired of short sellers writing story after story in the financial rags about how Tesla is on the verge of total collapse any day now. He figures if he goes private they'll be forced to pick a new target (or just write even more articles about Uber).
- kadenshep 8y ago
  Seems like a really fragile attitude to take when you're the head of a company.
  - SeanAppleby 8y ago
    Public opinion is swayed by the large volume of articles like these, and public opinion is important when you're running a high end, large scale b2c enterprise while making an emotional appeal that buying your product is something they should feel good about for their contribution to pushing the world in a better direction.
  - downrightmike 8y ago
    That, or they will make their quotas this year and this is the best way to keep the money in tesla/musk's control.
vannevar 8y ago
I have no idea why anybody would believe that. Well, a few reasons are listed in articles like this: https://www.bloomberg.com/graphics/2018-tesla-burns-cash/ https://www.bloomberg.com/graphics/2018-tesla-burns-cash/ It's clearly not false to state that the company will need a lot of money to scale going forward, compared to the money needed in the past. The only question is whether that money comes from revenue, debt, or investment. The revenue projections don't come close to covering it in the short term, and the company has already taken on quite a bit of debt with respect to its assets, making it unclear whether it could get loans for the amount of cash needed to scale up to "real car company"-sized manufacturing capacity. Maybe they don't need money, and Musk is just taking advantage of undervaluation to make a great deal. But it's certainly not crazy to think that they do need money, and if so, taking the company private may be the only viable option.
- toomuchtodo 8y ago
  > Tesla Going Private Would Demolish Doubters in Default Swaps > You can’t really bet against bonds that could soon no longer exist. https://www.bloomberg.com/view/articles/2018-08-08/elon-musk-taking-tesla-tsla-private-would-destroy-debt-doubters https://www.bloomberg.com/view/articles/2018-08-08/elon-musk... TL;DR Tesla going private at $420/share wipes out the bond debt. Their just-hired Chief Accounting Officer oversaw Seagate going private in 2000. https://www.reddit.com/r/teslamotors/comments/95gv0l/dave_morton_new_chief_accounting_officer_worked/ https://www.reddit.com/r/teslamotors/comments/95gv0l/dave_mo...
- dnomad 8y ago
  > Maybe they don't need money, and Musk is just taking advantage of undervaluation to make a great deal. But it's certainly not crazy to think that they do need money, and if so, taking the company private may be the only viable option. This doesn't make any sense. Companies don't go private because they need money unless it's a private buy-out. There is no indication at all that TSLA would have any trouble accessing the debt markets. In fact what we see is TSLA turning away investors like the Saudis who are eager to increase their exposure to the firm. If TSLA was so desperate for money why would they be turning away some of the biggest investors in the world?
  - anthonybsd 8y ago
    > There is no indication at all that TSLA would have any trouble accessing the debt markets. Actually there are a lot of indications that junk bond markets have little appetite for Tesla offerings: https://www.bloomberg.com/news/articles/2018-03-28/tesla-bonds-down-to-86-cents-start-to-flash-warning-signals https://www.bloomberg.com/news/articles/2018-03-28/tesla-bon... https://www.thestreet.com/investing/tesla-junk-bonds-sending-powerful-market-signal-14643694 https://www.thestreet.com/investing/tesla-junk-bonds-sending...
m1nes 8y ago
> I have no idea why anybody would believe that Just look at the last 10Q and the rising debt.

by nickik 8y ago

jandrese 8y ago

Basically Musk is tired of short sellers writing story after story in the financial rags about how Tesla is on the verge of total collapse any day now. He figures if he goes private they'll be forced to pick a new target (or just write even more articles about Uber).

kadenshep 8y ago
Seems like a really fragile attitude to take when you're the head of a company.
- SeanAppleby 8y ago
  Public opinion is swayed by the large volume of articles like these, and public opinion is important when you're running a high end, large scale b2c enterprise while making an emotional appeal that buying your product is something they should feel good about for their contribution to pushing the world in a better direction.
- downrightmike 8y ago
  That, or they will make their quotas this year and this is the best way to keep the money in tesla/musk's control.

vannevar 8y ago

I have no idea why anybody would believe that. Well, a few reasons are listed in articles like this: https://www.bloomberg.com/graphics/2018-tesla-burns-cash/ https://www.bloomberg.com/graphics/2018-tesla-burns-cash/ It's clearly not false to state that the company will need a lot of money to scale going forward, compared to the money needed in the past. The only question is whether that money comes from revenue, debt, or investment. The revenue projections don't come close to covering it in the short term, and the company has already taken on quite a bit of debt with respect to its assets, making it unclear whether it could get loans for the amount of cash needed to scale up to "real car company"-sized manufacturing capacity. Maybe they don't need money, and Musk is just taking advantage of undervaluation to make a great deal. But it's certainly not crazy to think that they do need money, and if so, taking the company private may be the only viable option.

toomuchtodo 8y ago
> Tesla Going Private Would Demolish Doubters in Default Swaps > You can’t really bet against bonds that could soon no longer exist. https://www.bloomberg.com/view/articles/2018-08-08/elon-musk-taking-tesla-tsla-private-would-destroy-debt-doubters https://www.bloomberg.com/view/articles/2018-08-08/elon-musk... TL;DR Tesla going private at $420/share wipes out the bond debt. Their just-hired Chief Accounting Officer oversaw Seagate going private in 2000. https://www.reddit.com/r/teslamotors/comments/95gv0l/dave_morton_new_chief_accounting_officer_worked/ https://www.reddit.com/r/teslamotors/comments/95gv0l/dave_mo...
dnomad 8y ago
> Maybe they don't need money, and Musk is just taking advantage of undervaluation to make a great deal. But it's certainly not crazy to think that they do need money, and if so, taking the company private may be the only viable option. This doesn't make any sense. Companies don't go private because they need money unless it's a private buy-out. There is no indication at all that TSLA would have any trouble accessing the debt markets. In fact what we see is TSLA turning away investors like the Saudis who are eager to increase their exposure to the firm. If TSLA was so desperate for money why would they be turning away some of the biggest investors in the world?
- anthonybsd 8y ago
  > There is no indication at all that TSLA would have any trouble accessing the debt markets. Actually there are a lot of indications that junk bond markets have little appetite for Tesla offerings: https://www.bloomberg.com/news/articles/2018-03-28/tesla-bonds-down-to-86-cents-start-to-flash-warning-signals https://www.bloomberg.com/news/articles/2018-03-28/tesla-bon... https://www.thestreet.com/investing/tesla-junk-bonds-sending-powerful-market-signal-14643694 https://www.thestreet.com/investing/tesla-junk-bonds-sending...

m1nes 8y ago

> I have no idea why anybody would believe that Just look at the last 10Q and the rising debt.