On Wednesday, before the stock market opened in New York, Goldman Sachs analyst Patrick Archambault upgraded shares of Tesla. Archambault put a “Buy” rating and a $250 per share price target on the stock due to what he sees as the market’s failure to “fully [capture] the company’s disruptive potential.”On Wednesday, after the market closed in New York, Tesla said it would sell $2 billion worth of stock, $1.4 billion of which would be issued by the company.
Running the book? Morgan Stanley and Goldman Sachs
What does everyone think?
Relevant articles:
http://www.zerohedge.com/news/2016-05-19/goldman-responds-goldmans-stoc…
http://www.businessinsider.com.au/goldman-sachs-tesla-equity-offering-2…
Latest iteration of the Ponzi scheme
Concerned over the legitimacy of the Chinese wall? Or is it just a coincidence?
Elon Musk is making out like a fat Raneiri.
Sell-side research is marketing. If the fund raise goes well, it will be successful. He should have thrown a caveat in there that the shares Goldman floats have more upside.
I'm shocked I tell ya.
In my investments class, we would always talk about how BS analyst recommendations are. They're doing their best not to piss off the company and so you inflate your words, and your valuation, so you get the business.
Not going to argue that sell side research is BS or a marketing tool, or whether analyst recommendations are valuable, etc.
But I don't think this move is suspicious at all. Analysts upgrade/downgrade stocks all the time, and companies issue equity all the time. Sometimes those are going to happen in close proximity to each other.
Fair enough, I don't see a firm like GS making a rookie error like this. For some, it is a bit too close for comfort though.
Let the retailers gobble that shit right up
Convenient timing to help prop up the stock while the 2B in issuance should be causing ~6-7% drop/sh
In fairness, if you're stupid enough to buy stock based off an analyst's recommendation, especially without reading the reasoning, then you deserve to lose (if you do lose). Does Patrick Archambault have some special skill in divining the future? If not then his opinion about Tesla's "disruptive" ability is as good as the opinion of anyone else.
That's how equity research and S&T works...... That's why generally when upgrades occur by the BB's the stocks rip higher... S&T team's call the PM's and tell them the story and let them know about the upgrade and if they are interested they will place an order through the desk....
Interesting that you were awarded for "best answer" lol
I know that's how it works. And people and portfolio managers who take analysts at face value and buy stocks on those opinions without critical evaluation have only themselves to blame if the pick goes wrong. Where am I wrong?
The real question is what's GS's historical relationship with the firm. Do they lend? Have the historically led Tesla's deals? If they've gone from bottom right to Global Preeminent Leading Bookrunner Manager that might raise some eyebrows but the context is important and frankly, it's really not worth the risk for this fee.
GS was a lead UW on their IPO and all three of their previous FOs. So i doubt this will raise too many red flags
I would argue no red flags at all. Everyone likes to be alarmist but all that happened was GS led another deal for a company that they have a good relationship with. Anyone who thinks that an analyst bumping their target is going to have an impact on a $2B order book is delusional.
if you're not long on whatever Elon Musk is doing you're living in the past, we need to nurture the younger generation as to encourage more people to push through the challenges and work on BIG ideas that will change the world for the better. speaking of, who here knows about http://singularityu.org/ ? the idea (as i remember it) is to work on an idea that will better the lives of a billion people
The actual price targets and recommendations are bullshit but the ideas aren't necessarily. Remember, it's not just about getting deals for these guys, is also about trading revenues, which are helped by good ER. Also, in situations where the analyst chooses to cover a company (not this situation), they generally won't choose to cover one that they can't in good conscience call a "buy".
Musk is selling 600mm of his own shares. If you don't think there's motivation for Goldman to put the price up to help him get the best price possible then your delusional IMO. Funny how they timed the two announcements too.
Actually pretty funny, I was bullish ST leading into yesterday's close and TSLA was one of the best performers yesterday due to the upgrade. I bought a couple calls in TSLA into the close. They announce the 2bn secondary offering (600mm of which is Musk's) and stock immediately goes from 211 to 203 after hours then snaps back to flat. Then it actually opened up today and closed positive. I was happy to dump my calls right at the open and not lose any money. Again, if you don't think this looks rigged, lol, stop riding your fantasy BB so hard
The red flag is that the company needs the money to survive
Or that Tesla has great ambitions for the Model 3
May have came off strong in that last post, you can get great skills doing equity research on the sell side as well, I'm just talking about the nature of the business. I worked in equity sales & trading for a little over a yr before I moved on, im just saying what I witnessed first hand
There is no doubt the shares were 'conveniently' upgraded as GS ran the follow on. However, I'd like to touch on some of the comments: many analysts are forced to upgrade shares for the sole reason of keeping the banking client - this is why there are so many sector perform ratings out there. There are companies analysts would love to downgrade, but cannot in order to keep the company as a banking client, or even worse, a potential banking client. This holds true for a lot of banks, but it highly depends on how an analyst runs his/her franchise. There are analysts that value their reputation and rate the companies in their universe on the direction where they believe the stock is going regardless if the company is a banking client or not. The analysts that do this get a lot of heat from the bank, but it is encouraging to see analysts respecting their business and not leading investors into a false opinion.
Also, analyst price targets are not BS - they are calculated from expected future earnings. Clients on the buy side do not want to see new price target changes every week that is the reason you may believe some of the targets out there are BS.
You really think GS would be that dumb? The timing will without a doubt cause the SEC to look into this.. they'd have to have 0 IQ to have done anything improper here
Goldman Sachs owns the government. There's a revolving door between Goldman Sachs and the Treasury, SEC, and other regulators.
Want a grt way to find out who on here is a fraud and doesn't work in the industry? They think ER matters... It's only good for corporate access, no one on the buy side cares about ratings, dgs, ugs, etc.
doesnt tesla need additional money to finance the construction of all those preordered model 3
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