Batten down the hatches! It’s going to be stormy out there. So, why don’t you settle down and welcome in Storm Dennis by indulging yourself in this week’s News, Views and Truths?
Or “This Week in Tesla”, as once again, our favourite non-car-making-car-manufacturer is making the headlines…
We all know about the frankly bonkers performance of the company; it truly is the investors’ darling at the moment. Last night they took this to the next level, cashing in on the recent stock inflation by issuing another $2bn worth of stock. This comes two weeks after the company’s founder, Elon Musk, stated that raising money “doesn’t make sense”.
So why would they do this? Well, for starters, the current super-duper high share price will determine this Initial Public Offering or IPO. This offering is priced at $767 a share, which is around a 5% discount from the current price. If Tesla made the same announcement this time last year, the shares would be priced at around $300. A soaring share price does not make the company any more money but offering new shares does. And Tesla needs money to fund its new Gigafactory. In Berlin.
If it was in the North East it may be called a Gitbigafactory. Anyway, I digress…
This new project will sit on a 300-hectare plot of land, which requires a significant deforestation process before moving forward. Well, all of those electric cars that will save us all from the imminent climate emergency won’t build themselves. And, you can’t make an omelette without breaking some eggs… or destroying a few hundred hectares of ancient Germanic woodland, which is also the habitat of the endangered Western Barbastelle species of bat.
Anyway, back to the IPO… Upon the announcement, Tesla‘s share price dipped due to the fact that a whole load of new shares dilutes the value of the existing shares. But that didn’t stop the inexorable surge of the Tesla as the share price soon bounced back, ending the day higher. And, as more and more investors see this, the demand for the stock increases in a self-fulfilling positive feedback loop.
Until it doesn’t and the bubble bursts. Stay tuned for the next episode of “This Week in Tesla”!
Closer to home, Three Counties announced that we have been awarded Chartered Status by the Chartered Insurance Institute. This is no mean feat and has been awarded to less than 1,000 firms across the UK. More information on this can be found HERE, but I’d like to take this opportunity to congratulate all my colleagues on their continual hard work and dedication which this award represents.
And finally, a playlist. I hope you all have a great weekend and I shall see you all next week.