Tesla looked strapped for cash and the easy means to raise it last year, but a six-fold surge in its share price in 2020 means the electric carmaker’s stock can easily absorb the $5bn capital raising announced today.
That is only about 1 per cent of its current market cap. Tesla said in a filing that it will sell shares from “time to time” through an “at-the-market” offering programme, a transaction in which companies gradually sell new shares to investors on the open market.
The stock has been further boosted by the five-for-one share split over the weekend. Tesla shares rose 12.6 per cent on Monday. Alphaville says the share price is nuts with it valuing the company as being worth 10 times more than General Motors, which shipped 7.7m cars last year, compared to Tesla’s 360,000.
But then Tesla is a battery company as well as a car company goes the argument, and Elon Musk needs more nickel. He told an earnings call last month that Tesla would give a “giant contract” to companies that could mine nickel “efficiently and in an environmentally sensitive way,” in response to a question about the biggest constraint on the electric car maker.
Just as Tesla’s share price has grown, Henry Sanderson reports nickel demand is expected to rise six-fold by 2030. The metal is key to improving the battery’s energy density, enabling vehicles to drive further on one charge.
But the problem is that nickel processing plants produce waste that is being disposed of in the sea in south-east Asia, potentially threatening coral reefs and marine creatures such as turtles.
The irony is clearly not lost on Mr Musk that producing cars for cleaner air in cities could create pollution elsewhere that damages delicate and irreplaceable ecosystems.
The Internet of (Five) Things
1. Zoom rises 40 per cent on video boom
Talking of soaring stocks, Zoom shares are currently 40.25 per cent higher today after Monday’s earnings report showed quarterly revenues were higher than those for the whole of 2019. Lex says the key to Zoom’s longevity is the tally of large corporate clients and that figure has more than doubled in the past year to 988, including ExxonMobil and Activision Blizzard.
2. Rocket Internet to delist
Here’s one damp squib for tech on the stock market. The German start-up factory behind internet companies including Delivery Hero, Zalando and Jumia, is planning to delist in Frankfurt and return to private ownership, with its share price having halved in the years since it went public in 2014.
3. A Chinese spanner in TikTok’s works
ByteDance’s hopes of reaching a deal to sell the US operations of its TikTok video app have been thrown into doubt after Beijing announced new rules governing technology exports. Our explainer says the restrictions may give ByteDance some leverage by allowing it to stretch out its negotiations with the US. Meanwhile, one suitor, Walmart, has launched a subscription service aimed at challenging Amazon Prime.
4. Facebook may block news in Oz
Not sure how it could do this technically, but Facebook has threatened to block users and publishers in Australia from sharing news on its platform if the country presses ahead with a landmark proposal to force big tech to pay media groups for carrying their content. The FT View is that the government’s moves are misguided on several fronts. Meanwhile, Google is to pass on the cost of digital services taxes in Europe to advertisers.
5. Farm robots get Covid-19 boost
With agricultural workers in short supply, year-to-date funding of start-ups in the farm robotics and automation sector, including vertical and indoor farms, has jumped 40 per cent. Also, not quite a robot, but Gertrude the pig was the shy star of the sty at Elon Musk’s unveiling of the latest brain implant from his Neuralink start-up.
Tech tools — Samsung Galaxy Z Fold2
Samsung held a special Unpacked event today to give more details on its second go at a foldable-screen smartphone. Pre-orders open on Wednesday for the Z Fold2 ahead of its availability at a stonking $1,999 on September 18. Techcrunch looks at the $3,300 Thom Browne edition connected to the American fashion designer.
Ben Wood, CCS Insight’s chief of research, says: “The Galaxy Fold2 addresses all the major shortcomings of its predecessor, most notably the 6.2-inch external display.”
“The Galaxy Fold2 is a significantly refined version of this flagship device. The larger external display lends itself to one-handed use in a similar manner to a ‘normal’ smartphone but you still have the benefit of the tablet-like 7.6-inch internal screen which is only marginally smaller than an iPad Mini. Add to that the new hinge which allows you to have the screen open at different angles and it’s a major step forward as the previous device was only really viable when it was fully open or closed.”
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