Tesla shares slid 9% on Thursday, building on the stock’s recent losses after the company’s largest outside shareholder reduced its position, and after the automaker said it would raise up to $5 billion in a new share offering.With Thursday’s decline, the stock is more than 18% below Monday’s close, a day when the name surged following its stock split.
Well, good to know that the cause was not something more fundamental. I think the largest outside shareholder had some institutional requirements to keep their share of any one company below like 5% or whatever. And issuing more shares is smart to help take advantage of such an enormous rise in corporate share price; it'd be almost dumb not to do it.I mean, I'm not someone who owns any stock in any individual company, but I'm a bit surprised they're considered worth any more than about $420 PRE-split ($84 post-split) considering it was only like a year or two when they were worth under $200 pre-split ($40 post-split). Tesla would just have to grow so dang much in order to justify that. They'd have to grow bigger than toyota or GM or anyone. (I hope they do... it'd be good for the future of this planet *as well as* Mars.)Then again, there's a better-than-even chance that Tesla will get access to EV credits again (as well as GM), and not just foreign producers, which should help Tesla grow a lot domestically.
Didn’t say it did. It was the absurd rise in value over the last year that triggered the requirement, not the split.
So, Tesla had a rough day today, losing 15% of its value including after hours trading wiping out about $60 billion dollars in market value. For reference, this loss of market value alone is 1% the size of the housing market correction last decade. Forbes estimates that Musk lost $7.6 billion dollars and Bloomberg estimates $8.5 billion, but that isn't including additional movement after hours. Almost all of the top billionaires lost some of their fortunes today, but Elon Musk was one of the highest out of the top 20. The question is if this move downward triggers buying or selling. It could go both ways and illuminate whether the stock was trading on momentum (going up) or valuation (being cheap).QuoteTesla shares slid 9% on Thursday, building on the stock’s recent losses after the company’s largest outside shareholder reduced its position, and after the automaker said it would raise up to $5 billion in a new share offering.With Thursday’s decline, the stock is more than 18% below Monday’s close, a day when the name surged following its stock split.https://www.cnbc.com/2020/09/03/tesla-is-dropping-again-bringing-three-day-loss-to-percent.html
Well, good to know that the cause was not something more fundamental. I think the largest outside shareholder had some institutional requirements to keep their share of any one company below like 5% or whatever. And issuing more shares is smart to help take advantage of such an enormous rise in corporate share price; it'd be almost dumb not to do it.
“The substantial increase in Tesla’s share price means that we needed to reduce our holding in order to reflect concentration guidelines which restrict the weight of a single stock in clients’ portfolios. However, we intend to remain significant shareholders for many years ahead.”
TESLA is still above $400 or the $2000+ at old pre split prices. As of close today. Such that from the standpoint of the 6 month's average MRKT CAP is still on the rise. This is used to determine eligibility for Elon's stock options. Longer it stays elevated above $2000 pre split prices or now above $400 after split prices the more gates is hit and the more possible stock options could be hit very rapidly in succession.Musk's assets are now at the level such that only a complete failure/bankruptcy of Tesla would actually hurt his plans for Mars. And even then if SpaceX and it's subsidiaries flourish that may not even hurt his assets position with respect to his Mars plans.
Quote from: oldAtlas_Eguy on 09/04/2020 09:07 pmTESLA is still above $400 or the $2000+ at old pre split prices. As of close today. Such that from the standpoint of the 6 month's average MRKT CAP is still on the rise. This is used to determine eligibility for Elon's stock options. Longer it stays elevated above $2000 pre split prices or now above $400 after split prices the more gates is hit and the more possible stock options could be hit very rapidly in succession.Musk's assets are now at the level such that only a complete failure/bankruptcy of Tesla would actually hurt his plans for Mars. And even then if SpaceX and it's subsidiaries flourish that may not even hurt his assets position with respect to his Mars plans.Well, keep in mind that Elon is highly leveraged in his Tesla shares. It wouldn't necessarily take a complete Tesla failure to seriously hurt Elon here, BUT Elon has proven to be pretty resilient in the past and has lots of friends, so it'd still probably be dumb to bet against him.
In a shocker that has analysts scratching their heads, TSLA was snubbed by S&P Dow Jones Indices and was not added to the S&P 500 index after achieving the common but unofficial benchmark requirement of four consecutive profitable quarters. Three other companies including Etsy were added instead. The three major US automakers are in the S&P 500, and all three market caps combined are well under 1/4 of Tesla's. S&P Dow Jone Indices is a private organization and is free to adjust the membership of their indices as they see fit. If they don't think TSLA should be in the S&P 500, that's their prerogative, and they don't have to explain why if they don't want to.
True, but it probably has something to do with the fact that most of Tesla's income is from regulatory credits at the moment. It's not really sustainable in the long term however beneficial it is in the short term.
But what you may not know is that Tesla has another source of income that is contributing hundreds of millions of dollars, or perhaps close to a billion dollar in 2020, to the company’s coffers. And that revenue source, which has been generated literally out of thin air, comes from the so-called “Regulatory Credits”.What are Regulatory Credits?Regulatory Credits are credits or points given by the state and federal government for contributing zero pollution to the environment. Basically, in the state of California and some other states in the US, auto manufacturers such as Tesla, Ford, General Motors and so on are required by laws to meet certain minimum emission standards for all the vehicles they produce and sell. Otherwise, they will face hefty fines or risk having their license revoked by the state government for failing to meet these emission standards.
Quote from: Slarty1080 on 09/05/2020 08:47 amTrue, but it probably has something to do with the fact that most of Tesla's income is from regulatory credits at the moment. It's not really sustainable in the long term however beneficial it is in the short term.Umm, are you sure of that statement? I’m not a finance guy but doesn’t “income” mean gross revenues? Maybe you meant profit and not income? I’m pretty sure Tesla’s revenues are dominated by car sales and not regulatory credit.
Quote from: butters on 09/05/2020 02:01 amIn a shocker that has analysts scratching their heads, TSLA was snubbed by S&P Dow Jones Indices and was not added to the S&P 500 index after achieving the common but unofficial benchmark requirement of four consecutive profitable quarters. Three other companies including Etsy were added instead. The three major US automakers are in the S&P 500, and all three market caps combined are well under 1/4 of Tesla's. S&P Dow Jone Indices is a private organization and is free to adjust the membership of their indices as they see fit. If they don't think TSLA should be in the S&P 500, that's their prerogative, and they don't have to explain why if they don't want to. It's not really a shocker. The S&P is prejudiced against what they consider hyper inflated stock, and they have a point. A lot of people, including me, see great things coming with the company, but you can't really fault a conservative organization for wanting to see a few years of stable operation before they let you in the club.
Even if Tesla stabilizes out at $300/share. That still represents for Musk a ~$60B asset. Add to that the $20B asset that SpaceX is right now and that is a value of $80B. Plenty to accomplish his goal of spending $10B for the start of the Colonization effort to Mars. NOTE: Current Tesla Share price is $418. So this is hedging that it may fall another 25% in the future if things don't go the way the market hopes in November. Also saying that it would go one way for one election result and another way for the other is not assured either. Stocks are highly volatile during elections and this one is more than most. A post split stock price that would represent a pre stock price of $300 is only $60/share. So if it returned to beginning of year 2020 prices it has a long way to go and a lot of cushion even in a volatile market.Also NOTE that Musk will get the cash for the company before the election and a possible major price slump. Such that the company's stock price will not affect the running of the company and its expansion in the next few years namely the next 4 years regardless.Getting too close to policy so be careful with posts and opinions and keep it about the Market and not about comments on a specific political outcome. Just that Tesla is currently inuring itself to weather whatever the outcome with little actual effect on the company.
