INTELLECTUAL STOCK INVESTOR

[mick]

Tesla Motors Inc: Shady TSLA Stock Offering Reeks of Desperation
Tesla is short on cash and investors are short on patience
By Aaron Levitt, InvestorPlace Contributor | May 19, 2016, 10:37 am EDT

????? short seller Jim Chanos

http://investorplace.com/2016/05/tesla-tsla-stock-offering-gs/#.Vz3rhpErKM8


Tesla Motors Inc (NASDAQ:TSLA) makes an incredible product.
Elon Musk is a genius.
His electric car-making monster has the potential to change the transportation industry and even the world forever.
And together, this has made some Tesla stock holders very rich in the process.
It’s tough to argue any of this.

The thing is, sometimes “disruptors”
can’t actually find a way to
make their big dreams work in concert with the
accountants
… and that seems to be the case for Musk and Tesla.

Tesla announced last night that the company would be
selling $2 billion worth of additional TSLA stock in a secondary offering
— the completely unsurprising follow-up to the company’s announcement that it would be pushing up its annual production target to 500,000 units by 2018.
Tesla needs infrastructure to build that many cars, and the money
had to come from somewhere … because it didn’t have it on hand.

Dreaming big is great, especially when you’re privately held.
But once you hit the public markets
— and that’s where Tesla stock is
— you can only kick the can so far down the road before investors start to get antsy.
The selling in TSLA since April is one indication that some
investors are getting fed up with the disconnect between dreams
and how they’ll be achieved.

And the past couple announcements from Tesla make it seem more and
more likely that famed short seller
Jim Chanos is right on Elon Musk and TSLA stock.

Right now, anyone in or considering entering Tesla stock needs
to separate any thoughts about the brilliant man from
his money-losing entities.

Some Shady Business in Tesla Stock
Companies execute secondary offerings all the time, so the idea of selling more shares is nothing new.
Shareholders get diluted this way all the time.
And depending on the company, it’s not necessarily a bad thing in the long run.

What has a lot of investors furrowing their brows is the way this
Tesla stock sale was announced.

On the morning of Wednesday, May 18, investment bank
Goldman Sachs Group Inc (NYSE:GS) upgraded TSLA stock to “Buy,”
giving it a new price target of $250 and saying it was
undervalued by 22%. As expected, Tesla shares shot upward.

Then, after the market closed, Goldman Sachs and Tesla were
intertwined in another way.

TSLA MS GS
Tesla Motors announced that it was going to sell an additional $2 billion worth of TSLA stock to help build out what
it needs to produce all those Model 3s.
The offering is being led by underwriters Morgan Stanley (NYSE:MS)
… and Goldman Sachs.

That’s right. Goldman Sachs lauded TSLA,
then showed up to sell those suddenly hyped shares to investors.

Activists, journalists and other market pundits took to Twitter,
and other media outlets to vent their frustration and legality of
the deal.

At the very least, it’s a pretty bad look for Tesla.

A Bigger Issue
The shady “pump-n-dump” is bad on its own, even if it’s legal,
which it most likely is.
But it does highlight some greater concerns.