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Comment by Animats | Hacker News Reader

Well, $1.4 billion for Tesla, $0.6 billion for Musk personally, and an option for Goldman Sachs to get $0.21 billion.[1] Tesla stock is down in after-hours trading, but that doesn't mean much. If the stock is down significantly at the close tomorrow, the market didn't like this.

It's a legit offering. The company intends to build a big factory and make stuff. Real capital assets will be bought with that money. It's not to sell stuff at a loss to gain market share in hopes of raising prices later. (Looking at you, Uber.)

Tesla just hired Audi's head of manufacturing, Peter Hochholdinger. About a week ago, the previous two top people in manufacturing quit, right after Musk announced he wanted the production line running two years sooner. Maybe Hochholdinger can do it.

[1] https://www.sec.gov/Archives/edgar/data/1318605/000119312516...

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> Tesla stock is down in after-hours trading, but that doesn't mean much. If the stock is down significantly at the close tomorrow, the market didn't like this.

Well... there's all kinds of information asymmetry in investing. Musk generally has a clearer picture of the company's future than investors, such that signalling theory postulates that when he decides to issue equity, this may be interpreted as him viewing the equity is overvalued. i.e. selling an overvalued stock makes sense. Particularly, selling an overvalued stock prior to bad news coming out that would negatively affect the valuation, such as a growing rate of cancelled orders. Just making something up here.

As such, knowing nothing about the firm, and only the timing of the equity issue, most investors are usually inclined to interpret an equity issue as the stock being overvalued somewhat, and adjust accordingly.

So the market not liking this may just be a function of general principles of finance, and have little to do with the specifics of the company itself.

As far as the information goes. Musk is selling his stock to buy his stock options and cover the resulting taxes. The documents stated, that even after he sold part of his stake for 0.6B he would have more shares than before.

Goldman Sachs and Elon Musk are likely the largest buyers of this offering. So the stock doesn't have to go down much from this dilution as they are absorbing it.

Well, I'm sure this will be successful, but I have to say - Elon has been such an amazing innovator and rebel to the car industry I just wish he was able To not do the BMW thing

bmw thing?

I think that was such a bad typo that I don't even know what I meant...

Musk is a seller in this offering.

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