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Nikola’s Stache @BSA19741
, 11 tweets, 3 min read Read on Twitter
1/ Some additional thoughts to share regarding $tsla: I) without a 405 waiver, $tsla is no longer a wksi and can’t go immediately effective. II) there are no “bad actor” disqualifications inherent to S1 or S3 eligibility. III)thus it is possible $tsla remains S3 eligible despite
2/ several missed 8K filings over the last couple of months...could be argued these were FD in nature & thus no impact on eligibility. IV) Assume $tsla retains eligibility. Any potential offering would still be subject to SEC review before going effective. 10 days to 4 months
3/ process depending on what the SEC wants to see in disclosures for $tsla. V) what will be necessary? I view these things as necessary: complete dissection of model 3 reservations (a bears dream) and a discussion of all current regulatory investigations. Massive other hurdles
4/ remain however. The long end would result if the SEC doesn’t sign off until the new Board and procedures are in place and reviewed. Seems likely to me. Taking us well into the time frame when underwriters and investors would demand a $tsla 10k to participate in an offering.
5/ if correct, $tsla is on its own until early March and if Q3 op cash flow trends are not significantly positive (they aren’t), $tsla’s forecast to mitigate ‘going concern’ will have failed. Most fail to realize the importance of this May guidance. It existed solely for this.
6/ To raise... mgmt will have to disclose disastrous current liquidity relative to near term obligations. ‘Going concern’ will appear in the 10Q... or GAAP is violated. Still further challenges exist for $tsla. Two separate reports of opex being either capitalized or materially
7/misclassified will raise questions. It seems clear in recent reports $tsla has material weakness in internal controls. Removal of FSD will raise questions on deferred revenue recognition in prior periods and the need for refunds. @PwC should be very worried & in risk mgmt mode
8/ this fact pattern and these hurdles are not consistent with this path for $tsla to survive. Thus the likely pursuit will be a $2-3 billion private raise in Q4 under a 506d exemption. For this, $tsla will need an investor who IGNORES 10b-5 lawsuit liability, the current HUGE
9/ hole in working capital, the fact that the raise is needed to repay debt only... not fund growth, that demand has cratered at higher price points, that margins don’t exist for lower priced demand and that $tsla manufacturing and delivery ops are a disaster.
10/ in summary, $tsla needs $2-3 billion right now... from an investor that won’t require any due diligence... an investor willing to accept unsellable shares for a period (6 mos) shorter than those funds can guarantee solvency. Good luck with that Elon. I’m betting against you
11/ and making one prediction: the term “financially delivered” existing on $tsla internal systems can put both you and Deepak in prison unless you think very carefully about the next two weeks. (Sorry if this is redundant but I’ve received many ?’s)
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