Tag Archives: tsla

Tesla Selling $2 Billion In Stock To Fund Production Ramp-Up

Electric automaker Tesla ( TSLA ) said late Wednesday that it will make a $2 billion secondary stock offering to fund its ambitious production schedule, sending its stock down in after-hours trading. “Because of the overwhelming demand that it has received for Model 3, Tesla intends to use the net proceeds from this offering to accelerate the ramp of Model 3,” said Tesla’s press release. “As noted in the company’s first-quarter shareholder letter , Tesla intends to start volume production and deliveries of Model 3 in late 2017 and to accelerate its 500,000 unit build plan from 2020 to 2018.” The company said $1.4 billion worth of stock will be sold by Tesla for this purpose. The remaining $600 million will be raised by CEO Elon Musk, who is exercising his option to acquire 5.5 million Tesla shares and will use the sale to cover his tax bill, the company said. He’s also donating 1.2 million shares to charity. Tesla stock was down more than 2% in after-hours trading Wednesday. In the regular session in the stock market today , Tesla rose 3.2% to close at 211.17, boosted by Goldman Sachs’ upgrade earlier in the day. Goldman upgraded the stock despite expressing deep skepticism about the 2018 production target, but the investment bank said the stock is attractively priced after falling 23% from early April through Tuesday.

Tesla Stock Getting Attractive At This Price, Says Goldman Sachs

Electric automaker Tesla ( TSLA ) got an upgrade Wednesday, as Goldman Sachs said the current share price isn’t accounting for the firm’s “disruptive potential.” Goldman Sachs analyst Patrick Archambault lifted his rating on Tesla stock to buy from neutral, though he kept his price target at 250, as the stock has fallen well below that level over the last three weeks. Tesla stock was up 4% in early trading on the stock market today , near 213. “While we believe the (production) volume targets are ambitious, Street and investor expectations seem more grounded, and following a 23% decline in the share price post the Model 3 unveil , we do not believe Tesla shares are fully capturing the company’s disruptive potential,” Archambault wrote in his research note. “This, combined with a more stable macro backdrop (relative to January/February) and increased confidence in Model 3 demand (from orders and our competitive benchmarking), drives attractive risk/reward.” Unlike his counterpart at Evercore last week, Archambault didn’t sound confident that Tesla could achieve its goal of 500,000 vehicles built by 2018, a new target CEO Elon Musk announced in Tesla’s its Q1 earnings report this month. The new goal is two years earlier than planned. But Archambault also thinks that most of Wall Street doesn’t really believe it either, lowering the downside risk. “While management was not clear why goals were set so aggressively, we view the adjustment as a target aimed at motivating employees and suppliers,” wrote the analyst. “We also believe these projections are heavily discounted with Street estimates for 2018 EBITDA and net income (excluding some of the more extreme outliers) coming in 21% and 24% below our base case.”

Apple Supplier NXP Follows Tesla-Rivaling Smart Car With Smart City

Apple ( AAPL ) supplier NXP Semiconductors ( NXPI ) Tuesday unveiled a slew of smart-city ventures — adding to its autonomous car platform, announced Monday, that rivals efforts by  Tesla Motors ( TSLA ), Alphabet ( GOOGL )-owned Google and Ford ( F ). NXP’s smart-city technology will be used by the U.S. Department of Transportation to streamline traffic and toll payments via automatic vehicle identification as part of its Smart Cities Challenge. Smart card ICs (intelligence chips) will simplify eGovernment services, NXP said. The Smart Cities Challenge features seven finalists vying for $40 million to become a truly “smart city”: Austin, Texas; Columbus, Ohio; Denver; Kansas City, Mo.; Pittsburgh; Portland, Ore.; and San Francisco face a May 24 deadline for proposals. On Monday, U.S. Transportation Secretary Anthony Foxx set out to visit the seven finalists. The winner will get $40 million “to fully integrate innovative technologies — self-driving cars, connected vehicles and smart sensors — into their transportation network.” NXP wants to be a part of that. To that end, on Monday  NXP announced its BlueBox engine to help “drivers ‘see’ around corners and through traffic obstacles, thereby calming traffic and helping reduce accidents.” Canaccord analyst Matthew Ramsay expects NXP to outgrow the macroeconomically strangled chip market through 2019 on 10% long-term growth in its automotive segment. On the stock market today , NXP stock fell a fraction, to 84.75. NXP says it has a 14.5% share of the automotive chip market, following its December acquisition of Freescale Semiconductor. NXP CEO Rick Clemmer estimates 40% of the company’s sales stem from the automotive segment. In 2016, NXP is targeting high-single-digit to 10% automotive growth, despite views for 3% growth in vehicle unit sales, Ramsay wrote in a research report. NXP sees sales into in-car networking, infotainment, security, powertrain and safety offsetting the small unit growth. Ramsay sees NXP hitting its target of $9 earnings per share minus items in 2019, at a 15% compound annual growth rate. It posted $5.60 EPS ex items last year. The company also has a path toward $4 billion earnings before interest, taxes, depreciation and amortization (EBITDA) in the same time frame. Ramsay kept his buy rating and 120 price target on NXP stock. Cree Joins NXP With Smart City Goals Also Tuesday, LED light-maker Cree ( CREE ) reported the results of a two-year study in Somerville, Tenn., where it says its XSP series luminaires had cut citywide lighting costs by a whopping 75% since their installation in August 2014. “We originally budgeted more than $100,000 a year for our lights, and now we budget $25,000,” Somerville Mayor Bob Turner said in Cree’s press release. “That’s $75,000 (in) tax dollars saved in the general fund.” Cree stock rose nearly 1% Tuesday.