Beyond the minimal short-term effect of the new announced financing agreement, the fact that Tesla continues to choose every way possible to “spin” its narrative in a dissembling way is another red flag for Tesla investors. The Deutsche Bank financing agreement is just a drop in the bucket of all of the capital that Tesla will need over the next three years but the company just couldn’t resist suggesting otherwise. What’s amazing to me is that there is also not a lot more scrutiny about Tesla’s claims that its May 2016 financing was supposed to be all the capital needed to support “full production” of the Model 3 and to complete any additional investment needed for the Gigafactory.Read more "Tesla’s New Lease Financing Disclosure: Who Writes This Stuff?"
Elon Musk‘s trying to save his legacy off the backs of Tesla shareholders … so claims a Tesla shareholder who’s suing the icon.
The shareholder claims Elon’s move to infuse his failing SolarCity with $2.6 billion of Tesla stock is outrageous, self-involved and irresponsible.
According to the docs … Elon’s trying to run Tesla like a privately held company, moving money around not because it’s right for the car company but to build his own legacy of changing the world.
The lawsuit claims Elon doesn’t have his eye on the ball … that Tesla itself is operating in the red, burning cash, and he should focus on building electric cars. The stockholder calls Elon’s obsession with SolarCity “a dangerous distraction.”
The shareholder says SolarCity is a stinker … the company went on the auction block recently and didn’t attract a single bidder.Read more "Tesla Shareholder Sues … DON’T BURN OUR MONEY TO SAVE YOUR CRAPPY SOLAR CO."
Elon Musk has controlling stakes in 3 companies: Tesla, SolarCity, and SpaceX. Tesla and SolarCity are publicly traded. SpaceX is not publicly traded. This document’s focus will be soley on the financial interdependencies of the companies. There are also incestuous business practices, and nepotism within the leadership of each company Musk controls.
We hope to illustrate simply and clearly the immense risk the US government has taken with your money by giving it to a man who is essentially telling them what they want to hear while picking their pockets doing it.Read more "How Elon Musk Used A Broken Marketplace To Play Us All"
The average rating of Tesla, according to FactSet data, is a “hold,” though estimates show its average target price of $243.53, about 23 percent above its current price.
Johnson said if investors are looking for names that will outperform in the last few months of the year, Tesla won’t be among them.
“I would move on to other names that look more attractive, like Apple, for example.”Read more "Tesla shares are primed to mark a grim milestone"
Still, many analysts warn Musk’s entities have to find a firm base of support before they can be counted on the long term.
Ross Gerber, chief executive officer of Gerber Kawasaki Wealth & Investment Management, for one is souring on Tesla’s fortunes even as his company holds a $5 million position in Tesla and has recently been selling shares.
“He’s got guts, I’ll give him that,” Gerber told reporters, adding: “He really pushes it out on his companies, but Elon could implode.”Read more "Elon Musk’s Fortune Plummets $779 Million As Tesla-SolarCity Flops"
But should a potential investor or customer engage their System 2 before buying Tesla stock or a Tesla vehicle, the case for buying the car — which is expensive, attractive, and seems to work fine as long as the driver can keep the battery charged – is far stronger than the case for buying the stock.
This comes to mind in considering the ginormous cash crunch facing Tesla due to its $2.6 billion merger with SolarCity — the solar energy service run by his cousins. (I have no financial interest in the companies mentioned in this post).
This merger offers investors four compelling reasons to bet against Tesla.
1. Strategic Rationale Is Weak
2. Musk Is Gripped By Delusions of Grandeur
3. Combined Companies Can’t Grow Out of Their Cash Conundrum
4. Tesla Has Weak Corporate GovernanceRead more "4 Reasons To Bet Against Tesla"
Elon Musk failed to disclose his purchase of SolarCity stock.
Musk bought 570,000 shares of SolarCity stock on February 11, evidently near the time he discussed the possibility of a merger with cousin Lyndon Rive.
The per-share purchase price ($17.56) was significantly below the implied valuation of SolarCity stock in the merger; hence, Musk will realize a profit of several million dollars if the merger is approved.
Again, EnerTuition’s article has an excellent and nuanced discussion of the stock purchase, and the questions it raises, so I skip over it here except to note Musk’s stock purchase further taints a deal that already has a bad odor.
If you are a Tesla shareholder (or, indeed, a SolarCity shareholder), and deciding how to vote on the merger, would any of these topics be important?
- A budget for CapEx needed to achieve volume production of the Model 3;
- Any change in 2016 delivery guidance;
- Any change in the number of Model 3 deposits since April;
- The yield on Tesla’s 32,000 Model X deposits;
- Details about Model S order backlog and demand;
- Details about Tesla Energy sales;
- Details about Tesla Energy margins;
- Details about Gigafactory sub-suppliers;
- Details about the “safety stock” Panasonic is requiring Tesla to pay for;
- Update on whether Tesla still plans to begin Model 3 production in July 2017;
- Update on whether Tesla still forecasts production of at least 100,000 Model 3 car in 2017.
If you believe any of this information might be useful in considering the merger proposal, too bad for you. The S-4 is silent about all this.Read more "Tesla & SolarCity: This Deal’s Getting Worse All The Time"