Tesla to discontinue lower variants of Model S sedan from April 16

Cesar Mills
March 21, 2017

His believers, along with investors who buy into the vision of Tesla Inc., could hardly be happier. But this is Musk, whose clean-energy company has captured imaginations on and off Wall Street even as the Palo Alto, California-based company has struggled to be profitable.

Tesla stock was near 262.75, up 0.5% during afternoon trading on the stock market today.

"We believe that Tesla has three key advantages: (1) a lead in battery technology cost; (2) unparalleled consumer awareness and brand; & (3) vertical integration that is not only brand reinforcing, but creates material cost savings in distribution - collectively these advantages could translate into an 800 bps+ profitability advantage long term vs. traditional OEMs".

"In that environment, it wouldn't make sense to have another, more upscale Tesla model priced just $10,000 above the Model 3's average transaction price", said Karl Brauer at Kelley Blue Book.

The offering will cushion the balance sheet of the youngest publicly held USA automaker as it ramps up spending to introduce the Model 3.

Tesla's capital raise was widely expected.

The firm increased its price target on Tesla to $240 from $220. "We would be encouraged to see the company raise closer to $2 billion".

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While raising cash isn't critical to releasing the Model 3, it would probably be wise, Musk said on the February 22 earnings call.

Tesla (NASDAQ:TSLA) opened at 260.27 on Monday. Vetr cut shares of Tesla from a "hold" rating to a "sell" rating and set a $244.13 target price on the stock.in a report on Tuesday, March 14th. After including the capital raise, he now estimates that the company will end this year with $1.8 billion in cash, which he described as "a significantly more comfortable liquidity cushion". Tesla's prospectus shows Musk has a US$344.4 million loan from Morgan Stanley. So, the company ended up raising around $350 million more via common stock than had originally been planned.

Tesla vehicles outside of Tesla factory. Annual EPS Growth of past 5 years is -13.10%.

Model 3. Image source: Tesla.

Deutsche Bank assumes Tesla will produce 22,000 Model 3 units in 2017, of which 20,000 will occur in the fourth quarter.

03/16/2017 - Tesla Motors, Inc. had its "outperform" rating reiterated by analysts at Robert W. Baird.

For the first half of the year, Tesla said it expects to deliver 47,000 to 50,000 Model S and Model X vehicles combined, up 62% to 72% compared to same period in 2016.

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