Tesla gets a boost after $2.3B debt and stock offering that Elon Musk is buying into

Tesla gets a boost after $2.3B debt and stock offering that Elon Musk is buying into

12:15pm, 2nd May, 2019
Tesla CEO Elon Musk checks out the Model Y during its unveiling in March. (Tesla via YouTube) Tesla is aiming to raise up to $2.3 billion in newly announced offerings of stock and convertible notes, just a week after CEO Elon Musk told analysts that the . Musk himself will purchase an additional $10 million of common stock, Tesla said today in a . That would add to his status as the electric-car company’s largest shareholder, with roughly 20 percent of Tesla’s shares. The share price was more than 3.5 percent above the previous day’s close during midday trading today. Wedbush Securities analyst Dan Ives said in a note to investors that the offerings were a “clear net positive for Tesla” because they cleared up long-lingering uncertainty over whether Tesla would have enough cash on hand to meet upcoming debt payments. One of the offerings announced today will make $650 million in common stock available, while the second offering calls for the issuance of up to $1.35 billion in convertible senior notes due in 2024. There’s also a 30-day option for underwriters to purchase up to an additional 15% of each offering. If all the options are exercised, the gross proceeds would come to about $2.3 billion before discounts and expenses, Tesla said. Goldman Sachs and Citigroup are acting as joint lead managers for the offering, with involvement as well from BofA Merrill Lynch, Deutsche Bank Securities, Morgan Stanley, Credit Suisse, Societe Generale and Wells Fargo Securities. The company said it would “use the net proceeds to further strengthen its balance sheet, as well as for general corporate purposes.” In last week’s financial report, Tesla for the first quarter of the year, after posting profits for the previous two quarters. Looking ahead, the company has ambitious plans to ramp up production of its Model 3 electric car and move ahead with projects ranging from its Semi truck, Model Y crossover SUV and all-electric pickup truck to electricity-generating solar roofs, a and car insurance. Some analysts worry about the effect of Tesla’s financial losses, the gradual fade-out of federal tax credits and rising competition in the electric-vehicle market. Such uncertainties, coupled with , have led to dramatic ups and downs in the share price over the past year. A year ago, for Tesla’s investors: “Do not buy if volatility is scary,” he said.
Elon Musk touches on his Twitter tactics after settling with SEC over Tesla tweets

Elon Musk touches on his Twitter tactics after settling with SEC over Tesla tweets

1:09pm, 27th April, 2019
Tesla CEO Elon Musk unveils the Model 3 electric car in 2016. (Tesla via YouTube) Tesla CEO Elon Musk has to keep his Twitter habit in check — and feels comfortable enough with the arrangement to refer to it in a teasing tweet. Friday’s settlement was a serious matter: Musk could have faced sanctions for contempt of court if he failed to patch up the rift with the SEC over whether he was following the terms of an . To refresh your memory, the SEC last September for incorrectly claiming on Twitter that he had secured funding to buy up publicly traded shares of the Tesla electric-car company and take the company private. Under the terms of the settlement of that fraud case, Musk and Tesla each paid a $20 million fine, Musk agreed to surrender his title as chairman, and he agreed to have tweets about Tesla reviewed in advance by a company overseer. (Some folks have referred to that person as Musk’s “Twitter sitter.”) During the months that followed, Musk made statements suggesting that he had a loose interpretation of what fell under the Twitter sitter’s purview, and in February he sent out a controversial Tesla-centric tweet that the company’s lawyers acknowledged wasn’t cleared in advance. Tesla made 0 cars in 2011, but will make around 500k in 2019 — Elon Musk (@elonmusk) That’s what set off the . U.S. District Judge Alison Nathan told Musk and the SEC to resolve their differences, and after a couple of extensions, the two parties finally filed the for Nathan’s review and likely approval. The consent motion gets specific about the topics that Musk will have to have the company overseer review before issuing written statements in venues ranging from Twitter to press releases and blog posts. (We’ve included the list at the end of this report.) Musk didn’t make any direct comments about the agreement, or how he’ll change his tweeting ways, but he did touch on the tiff in a Twitter conversation about his Twitter habit. (So meta!) Here’s how the exchange played out: sometimes i think Neuralink is already implanted in you… how can you keep up with all of your twitter mentions & pick which one is important or interesting to respond to!? — Evelyn Janeidy Arevalo (@JaneidyEve) Only see about 5% of mentions. No deep logic to those I answer. Aspirationally useful, but often whimsical. — Elon Musk (@elonmusk) It’s just me writing, so the foolish things I say are entirely my fault
Tesla CEO Elon Musk unveils his Robotaxi concept for a self-driving rideshare fleet

Tesla CEO Elon Musk unveils his Robotaxi concept for a self-driving rideshare fleet

5:36pm, 22nd April, 2019
Tesla shows off a configuration for a Robotaxi front seat without a steering wheel. (Tesla via YouTube) Tesla’s billionaire CEO, Elon Musk, laid out a vision for a huge fleet of self-driving electric vehicles that owners could share with friends or other riders, with Tesla getting a cut of the proceeds. The Robotaxi concept relies on the ability to make Tesla cars fully autonomous, to the point that the steering wheels can be removed. “By the middle of next year, we’ll have over a million Tesla cars on the road with full self-driving hardware, feature complete, at a reliability level that we would consider that no one needs to pay attention,” Musk told investors at Tesla’s headquarters in Palo Alto, Calif. Musk acknowledged that the timetable could be in flux, due to regulatory concerns as well as his tendency to get overly optimistic about timetables. He pointed to Tesla’s past achievements, including the creation of the all-electric Roadster, Model S, Model X and Model 3, as well as its production of solar roofs for power generation and battery packs for personal and grid-level energy storage. “Only criticism, and it’s a fair one, [is that] sometimes I’m not on time,” Musk said. “But I get it done, and the Tesla team gets it done.” Based on Tesla’s market performance, Musk might still have some convincing to do: During today’s trading, share prices declined nearly 4 percent, to $262.75 per share, and drifted in after-hours trading during . The downturn had more to do with , including a downgrade in Evercore’s market outlook and this week’s expected news of first-quarter losses. Nevertheless, the trend underscored the view that Musk’s Robotaxi plan wouldn’t be a slam-dunk. Tesla CEO Elon Musk discusses the Robotaxi concept. (Tesla via YouTube) The concept would let Tesla owners make their car available for others to drive when they’re not using it, through a smartphone-based app system that matches up cars with riders. Tesla and the owner would share revenue from the ride. Tesla estimates that the cost to run a Robotaxi would be less than 18 cents per mile, compared with 62 cents per mile for U.S. ownership cost and $2 to $3 per mile for traditional ridesharing models. The fact that no driver is required is key to the financial formula. During the Autonomy Day presentation, Tesla engineers spent most of their time laying out the case for expecting that their computer-vision system would satisfy the requirements for full autonomy within the next year or so. Tesla cars that were built since October 2016 would be eligible for over-the-air upgrades to full autonomy, but not cars sold before that time, Musk said. “Unless it’s designed in, it’s not worth it,” he said. Musk said he expected full autonomy to transform the automotive market within two or three years. “Once regulators are comfortable with us not having a steering wheel, we’ll just delete that. … The probability of the steering wheel being taken away in the future is 100%. Consumers will demand it,” he said. In an , Cornell University computer scientist Bart Selman said that’s debatable. Selman said Tesla may face an “extra level of difficulty” because it’s aiming to get to full autonomy by relying exclusively on computer vision without including a lidar laser-scanning system. There’s a broader issue as well: Statistically speaking, self-driving cars may well be safer than human-driven cars — but could conceivably fall prey to unusual accident scenarios that humans would easily avoid, such as . “The question then becomes whether society will choose the greater overall safety level over the risk of having certain types of ‘non-human’ accidents occur with some regularity,” Selman wrote. Other questions had to do with the business model for Robotaxi. Musk said Tesla would operate its own on-demand cars in areas where there weren’t enough to serve the market. He pointed out that Tesla’s leased cars will not be available for purchase when the lease expires, and that those cars would be reclaimed for Tesla’s Robotaxi fleet. One analyst asked about a scenario in which Tesla owners worked out their own car-sharing schemes. That led Musk to point out that a clause in Tesla’s contract forbids drivers to do ride-sharing outside Tesla’s own network. But couldn’t drivers work out a car rental arrangement? “Seems easy,” the analyst said. “OK …” Musk replied. Musk also acknowledged that Tesla, and not the car’s owner, would probably be held responsible for any accidents or injuries caused by Robotaxis. “The right thing to do is to make sure there are very few accidents,” he added. Will regulators go for the idea? That may well be the multimillion-dollar question for Tesla. “We won’t have regulatory approval everywhere, but I’m confident we’ll have regulatory approval somewhere,” Musk said. Even assuming that full autonomy wins regulatory clearance, Tesla would still face formidable competition from the likes of , , Alphabet’s venture and GM’s subsidiary. and are also joining the fray.
‘We are bringing S3XY back’: Tesla’s Elon Musk introduces Model Y crossover SUV

‘We are bringing S3XY back’: Tesla’s Elon Musk introduces Model Y crossover SUV

12:55am, 15th March, 2019
Tesla CEO Elon Musk checks out the newly unveiled Model Y. (Tesla via YouTube) Tesla CEO Elon Musk finished spelling out an all-electric acronym by lifting the veil on the Model Y, a crossover SUV that’s due to hit the market in the fall of 2020. “We are bringing ‘sexy’ back, quite literally,” he told hundreds of Tesla fans who gathered for the Hollywood-style unveiling at Tesla’s design studio in Hawthorne, Calif. Musk didn’t quite literally lift a veil to reveal the new model. Instead, he built up the suspense by giving an “extended history lesson” about Tesla’s decade-long history of vehicle production, starting with the Tesla Roadster and moving on to the Model S, Model X, Model 3, the Semi truck and the remade Roadster. Along the way, Musk explained the ins and outs of his naming convention, including the fact that he couldn’t use the name “Model E” because Ford had it trademarked. “Ford killed SEX,” Musk joked. As he described the vehicles, each model was driven into the spotlight. Finally it was the Model Y’s turn. Cheers and whoops went up from the crowd as a shiny blue car pulled into its place alongside the Model S, 3, X. Y completed the acronym. The car looks as much like the Model 3 as Tesla’s Model X SUV looks like the Model S sedan. The similarities between the designs are intentional, because that commonality is expected to speed development — thus avoiding the “production hell” that marked the Model 3’s birth. A chart projected on the screen with Tesla CEO Elon Musk in an inset image shows the basic statistics for different versions of the Model Y. Click on the image for a larger version. (Tesla via YouTube) Musk laid out the basic statistics for four variants of the Model Y: The Standard Range model will be the cheapest, carrying a price tag of $39,000 and offering a maximum range of 230 miles and top speed of 120 mph. The $60,000 Performance model will be the most expensive variant, with a 280-mile range and a 150 mph top speed. The $47,000 Long Range model is projected to go 300 miles on a charge, while the Dual Motor AWD version prices out at $51,000. Tesla says the three more expensive versions will be ready for delivery in the fall of 2020, while the Standard Range model will go on the market in the spring of 2021. Orders are . All four variants will have a panoramic glass roof, 66 cubic feet of interior space and can seat up to seven, Musk said. “It has the functionality of an SUV but it will ride like a sports car,” he said. Some analysts wonder whether the promise of the Model Y will hurt sales of the Model 3, as buyers decide to wait for the newer model. Musk insisted that Model 3 sales would rise dramatically over the next year, making the sorts of optimistic projections that when he put them in a tweet. “We’ve made 550,000 vehicles, something like that,” he said. “Twelve months from now, we will have made about a million vehicles.” Musk was even more optimistic about Model Y sales. “I’m confident that of any midsize SUV, it’ll be the one you want,” he said. “I think it’ll probably sell … I think we’ll probably do more Model Y’s than S, X and 3 combined, most likely. So there you have the S3XY presentation.” On other topics: Musk said ramping up production of the Model 3 and dealing with controversies ranging from a to a made for a rough year. “2018 felt like aging five years in one,” he said. He indicated that battery production for the Model 3 has stabilized to the point that Tesla can start ramping up production of electricity-generating solar roof tiles and Powerwall home-battery installations. “This is definitely going to be the year of the solar roof and the Powerwall,” Musk said. Referring to one of his other day jobs as CEO at SpaceX, Musk half-jokingly said “we will be driving a Tesla on Mars” in 10 years. “I think we actually could.”
Tesla’s fortunes spin after SEC accuses CEO Elon Musk of violating a tweet deal

Tesla’s fortunes spin after SEC accuses CEO Elon Musk of violating a tweet deal

3:28pm, 26th February, 2019
Tesla CEO Elon Musk’s Twitter habit has sparked gyrations in the stock market. (Tesla via YouTube) Tesla CEO Elon Musk is in trouble again with the Securities and Exchange Commission, this time over a 13-word tweet. The SEC filed a motion in federal court on Monday, claiming that a tweet that Musk sent out last week violated the terms of an brought last September. After the motion came to light, lost as much as 5 percent of their $298.77 market-close value in after-hours trading. The price crept back to somewhere around its previous level overnight, however, as traders digested the news. It’s the latest in a series of ups and downs (or, more accurately, “downs and ups”) caused by Musk’s Twitter habit. Read the PDF: Under the terms of last year’s agreement, Musk was supposed to have all of his Twitter comments pre-approved by Tesla’s designated representative if they touched upon “information material to the company or its shareholders.” That provision was meant to head off tweets like the one that Musk sent out last August, claiming that he had “funding secured” to take Tesla private even though that wasn’t actually the case. That claim and its aftermath sparked wild gyrations in the market, leading the SEC to open its fraud investigation. The agreement also required Musk to step down from his post as Tesla’s chairman and pay a $20 million fine. Tesla was also fined $20 million, and was forced to appoint two new independent directors to its board. The seeming resolution of the SEC case, plus Tesla’s , sent Tesla’s share price as high as $376. But Musk touched off a new round of regulatory trouble on Feb. 19 when he talked about the production outlook for this year: Tesla made 0 cars in 2011, but will make around 500k in 2019 — Elon Musk (@elonmusk) That claim was amended a little more than four hours later: Meant to say annualized production rate at end of 2019 probably around 500k, ie 10k cars/week. Deliveries for year still estimated to be about 400k. — Elon Musk (@elonmusk) The SEC seized on the initial tweet, and within days investigators were asking Tesla whether the tweet had been pre-approved. In court filings (which Tesla had sought to make confidential), Bradley Bondi, a lawyer for Tesla, acknowledged that the first tweet had not been specifically pre-approved. Instead, it “was intended to recapitulate the information set forth” in forward-looking statements that were made by Tesla and Musk in January, in connection with year-end results. “Mr. Musk believed that the substance had already been appropriately vetted, pre-approved, and publicly disseminated,” Bondi wrote. The substance wasn’t quite the same, though. Back in January, Tesla said it was aiming to hit a , or an annualized rate of roughly 500,000 a year, assuming that no snags arose in its plans for expansion in China. That’s not exactly what Musk said in the first tweet. Bondi said Tesla’s designated tweet-checkers realized that, and so they hammered out the wording of the second tweet as a clarification. Read the PDF: For what it’s worth, on the day after the tweet, Tesla’s general counsel, Dan Butswinkas, after spending only two months on the job. Jonathan Chang, vice president of Tesla’s legal department, took over Butswinkas’ position. The SEC said the fact that Musk didn’t get pre-approval of the wording for the “evidently inaccurate” first tweet was a violation of the agreement. As a result, the SEC is calling on Musk to show cause why he should not be held in contempt of the court’s judgment from last September. “A violation need not be willful in order to find contempt,” the SEC wrote in its motion to U.S. District Court in the Southern District of New York, where the original judgment was filed. The SEC also cited last December as evidence that he wasn’t taking the agreement’s requirements seriously. Back then, Musk acknowledged that none of his tweets had been “censored” since the settlement. “I guess we might make some mistakes,” he told CBS’ Lesley Stahl. “Who knows? … Nobody’s perfect.” Musk went on to say that “I do not respect the SEC … I do not respect them” — but would abide by the settlement “because I respect the justice system.” Now it’s up to the justice system to decide whether to take Musk to task over an ill-turned tweet. U.S. District Judge Alison Nathan gave Musk a March 11 deadline to explain why he shouldn’t be held in contempt. If Nathan rules that the violation is serious enough, Musk could face further limitations on his activity at Tesla … or on Twitter. In a follow-up Twitter exchange, Musk signaled that he intends to stick to his guns: SEC forgot to read Tesla earnings transcript, which clearly states 350k to 500k. How embarrassing …
Tesla’s shares plummet after SEC accuses CEO Elon Musk of violating a tweet deal

Tesla’s shares plummet after SEC accuses CEO Elon Musk of violating a tweet deal

8:53pm, 25th February, 2019
Tesla CEO Elon Musk’s Twitter habit has sparked gyrations in the stock market. (Tesla via YouTube) Tesla CEO Elon Musk is in trouble again with the Securities and Exchange Commission, this time over a 13-word tweet. The SEC filed a motion in federal court today, claiming that a tweet that Musk sent out last week violated the terms of an agreement aimed at settling a securities fraud case brought last September. After today’s motion came to light, Tesla’s share price dropped by more than 4 percent in after-hours trading, from $298.77 at the close to around $288 a couple of hours later. It’s the latest in a series of ups and downs caused by Musk’s Twitter habit. Read the PDF: Under the terms of last year’s agreement, Musk was supposed to have all of his Twitter comments pre-approved by Tesla’s designated representative if they touched upon “information material to the company or its shareholders.” That provision was meant to head off tweets like the one that Musk sent out last August, claiming that he had “funding secured” to take Tesla private even though that wasn’t actually the case. That claim and its aftermath sparked wild gyrations in the market, leading the SEC to open its fraud investigation. The agreement also required Musk to step down from his post as Tesla’s chairman and pay a $20 million fine. Tesla was also fined $20 million, and was forced to appoint two new independent directors to its board. The seeming resolution of the SEC case, plus Tesla’s profit-generating increase in production for its Model 3 electric car, sent Tesla’s share price as high as $376. But Musk touched off a new round of regulatory trouble on Feb. 19 when he talked about the production outlook for this year: Tesla made 0 cars in 2011, but will make around 500k in 2019 — Elon Musk (@elonmusk) That claim was amended a little more than four hours later: Meant to say annualized production rate at end of 2019 probably around 500k, ie 10k cars/week. Deliveries for year still estimated to be about 400k. — Elon Musk (@elonmusk) The SEC seized on the initial tweet, and within days investigators were asking Tesla whether the tweet had been pre-approved. In court filings (which Tesla had sought to make confidential), Bradley Bondi, a lawyer for Tesla, acknowledged that the first tweet had not been specifically pre-approved. Instead, it “was intended to recapitulate the information set forth” in forward-looking statements that were made by Tesla and Musk in January, in connection with year-end results. “Mr. Musk believed that the substance had already been appropriately vetted, pre-approved, and publicly disseminated,” Bondi wrote. The substance wasn’t quite the same, though. Back in January, Tesla said it was aiming to hit a goal of turning out about 10,000 cars a week sometime between the end of 2019 and the middle of 2020. That’s not exactly what Musk said in the first tweet. Tesla’s designated tweet-checkers realized that, and so they hammered out the wording of the second tweet as a clarification, Bondi said. Read the PDF: For what it’s worth, on the day after the tweet, Tesla’s general counsel, Dan Butswinkas, announced that he was leaving the company after spending only two months on the job. Jonathan Chang, vice president of Tesla’s legal department, took over Butswinkas’ position. The SEC said the fact that Musk didn’t get pre-approval of the wording for the “evidently inaccurate” first tweet was a violation of the agreement. As a result, the SEC is calling on Musk to show cause why he should not be held in contempt of the court’s judgment from last September. “A violation need not be willful in order to find contempt,” the SEC wrote in its motion to U.S. District Court in the Southern District of New York, where the original judgment was filed. The SEC also cited an interview with Musk that aired on CBS’ “60 Minutes” TV show last December as evidence that he wasn’t taking the agreement’s requirements seriously. Back then, Musk acknowledged that none of his tweets had been “censored” since the settlement. “I guess we might make some mistakes,” he told CBS’ Lesley Stahl. “Who knows? … Nobody’s perfect.” Musk went on to say that “I do not respect the SEC … I do not respect them” — but would comply with the agreement “because I respect the justice system.” Now it’s up to the justice system to decide whether to take Musk to task over an ill-turned tweet. If the judge in the case thinks the violation is serious enough, Musk could face further limitations on his role at Tesla.