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The dilution is peanuts compared to the premium they paid in the first place for Elon Musk's reality distortion field. edit: to further explain what I have app
by damoncali 13y ago
The dilution is peanuts compared to the premium they paid in the first place for Elon Musk's reality distortion field.
edit: to further explain what I have apparently not (judging by the speed with which I got the first downvote), what I am saying is that Tesla trades at a massive premium to any normal way of valuing a public company - far more than the dilution of another offering. Clearly, the people investing in Tesla are not worried about dilution, and are betting on the Big Plan and the ability of Elon Musk to create something absolutely freaking massive. Either that, or they're just not doing the math. But I'd bet on the former.
- jnw2 13y agoTesla strikes me as having a lot more growth potential than any other publicly traded company I'm aware of, if things go well for Tesla. I certainly think its value is based upon future earnings potential, and not current revenue.
- jnw2 13y agoOn the other hand, if Tesla continues to raise funds every six months in a manner similar to the recent secondary offering, buying and holding the stock for a long time will probably not turn out to be the fantastic deal for shareholders that it has a good chance of being if Tesla chooses to bootstrap from here to 20 million cars/year. Elon seems more interested in accelerating EV adoption than making his shareholders rich, so we'll probably see more of these secondary offerings if they can happen on terms Tesla finds reasonably good.