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Almington Capital @AlmingtonCapit1
, 12 tweets, 10 min read Read on Twitter
1/ Thread on @SpaceX trying to raise $500mn in the wake of a punishing @WSJ exposé based on our latest note:


@markbspiegel @TeslaCharts @BlondesE @WallStCynic @painfulshort @iamhubris @orthereaboot
2/ In its last funding round, in April 2018, #SpaceX was valued at $27.5bn. As of this latest round, it's now valued at $30.5bn. That is crazy for an unprofitable company facing a weak 2019 launch schedule & mounting competition. $TSLAQ

3/ The valuation is even crazier when one recognizes that, not only is #SpaceX unprofitable, it deliberately tried to deceive the debt market about that fact by excluding a number of critical expenses from its prospectus. Classic @elonmusk and $TSLAQ…
4/ Speaking of that debt offering, #SpaceX tried to raise $750 mill but had to settle for $250. Our Lord Elon tried to spin it as an internal decision but the LIBOR+425 rate told a different story. $TSLA $TSLAQ…
5/ Now we have an equity offering on the cards. Why so sudden?

Perhaps, as @iamhubris has suggested, it could be that Elon fears the SEC will revoke the Reg. D waiver that allows it to raise capital in light of the latest @WSJ exposé on @TheBoringComp

6/ Speaking of the @WSJ story, evidently Elon has been a naughty boy diverting funds, materials, and personnel to build his little vanity project. All without board or shareholder knowledge or approval.
7/ Elon has tried to backfill, handing over 6% of Boring Co stock to #SpaceX. But there's no record of how it was valued & SpaceX shareholders had no say. One might think theyd want to be consulted before paying for a second-hand TBM. $TSLA

8/ Despite the headline that #SpaceX is raising $500 mill, its far from a done deal. Capital markets are more dubious about Musk’s empire, @BaillieGifford's perverse commitment notwithstanding. Only last month, SpaceX could fill just 1/3 of a debt offering…
9/ #SpaceX didn't have much luck earlier in 2018 when it tried to raise equity, as @TeslaCharts has pointed out in the past. The company authorized issuance of shares worth up to $507 million, but it only managed to bring in $214 million. $TSLA $TSLAQ

10/ The clear signs of tunneling fraud look like the tip of the iceberg. We are witnessing the first unambiguous case of funneling cash from one Musk venture to another, without any form of corporate oversight. We would be surprised if @SEC_Enforcement sits on its hands for long.
11/ Of course, Elon has tried to get off the hook by claiming that Peter Thiel's Founder's Fund is cool with the arrangement, ergo it's all kosher. That is obviously false. One shareholder giving retroactive approval does not exculpate fraudulent action.

12/ Ultimately, even if everything goes right with this raise and the SEC leave this clear case of financial tunneling alone, #SpaceX is still in trouble: To fund its promised growth, it will need to raise billions more, which means massive dilution.
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