My views on the recent capital raise: Either the management is a liar or bloody genius. I feel it’s the latter and I’ll explain why, but first some background.

They denied needing a capital raise saying Tesla has enough cash to deploy whenever needed then proceeded to make an about turn in less than a month. Granted the share price went up 30+% since the earnings call.

My opinion, the sudden jump in share price caught even the management by surprise. There were no change in fundamentals and management knowing projections better decided that it’s a good time to make a raise which essentially increases their cash position by 30% with a less than 2% dilution of the stock. A no brainer considering the looming virus threat and short term uncertainties in demand.

Fundamentally, the company’s prospects have become more positive and their long term outlook is even better due to the raise. I invested in early 2019, mid 2019 and early 2020 and will be holding as my original thesis hasn’t changed despite the current slowdown. I still see Tesla as slightly overvalued short term but very undervalued long term. So if I’m a short term trader and I had money now but no shares, I’ll wait a bit until after Q1 earnings to get a picture of how impacted Tesla is by the macro, and will make a decision then. Long term though, there’s no better time than now to buy.

So, make your own decision and move forward.

Full disclosure: I have shares in Tesla