Elon Musk is grimacing all the way to the bank as Tesla finally raises more money (TSLA)

• Tesla finally decided to do a capital raise, and it should bring in about $400 million more than the company originally planned.
• The Tesla capital raise — a combination of equity and debt — will intensify CEO Elon Musk's pivoting of Tesla from an electric car company to a robotaxi service.
• That might make for a more profitable business, but it will also turn Tesla from the most interesting company on Earth to one of the most boring.
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Last week, Tesla finally faced up to the realities of its business and decided to raise some more money by selling stock and issuing debt. What started out as a $2.3 billion prospectus rapidly became a $2.7 billion offering. With only about $2 billion in cash on hand before the raise, Tesla should now be able to comfortably ride out the year.

Sharp surprise seized the #TSLAQ bankruptcy-cheerleading online naysayers. Tesla stock shot above $250, the level at which the company has raised money in the past. The end times have been delayed. Tesla isn't Theranos.

That's not to say Elon Musk is happy about the victory. He likely didn't want to raise any more money from Wall Street. But business reality in the auto industry can't be denied: carmakers are capital gluttons. Maybe Musk should have stuck with a mission to Mars and taken a pass on the electric-vehicle revolution.

Read more: Tesla is finally raising capital — and it's about time

Musk is now entitled to laugh all the way to the bank, as the inhabitants of the #TSLAQ fever swamp were counting to a certain extent on Tesla losing access to financing sources. That's what many professional short-sellers have been betting on, and if Tesla had been shut out of capital raising, it would indeed be in a pickle.

But that was never going to happen, and while Musk likely knew that, I'd bet he earnestly wanted Tesla to prove that it could be sustainably profitable after two straight quarters in the black to end 2018. It's the CEO's fault that Tesla couldn't live up to his own expectations; his determination to reinvent manufacturing hurt the rollout of Tesla's Model 3. The vehicle's production ramp was 12 months behind what a proper 21st-century automaker would have been able to achieve with minimal drama.

But hey, water under the bridge!

Risk for Tesla bears — and bulls

The risk now is that although Tesla's critics will have to comfort themselves with their own grumbling counsel, the company's boosters will probably feel empowered to resume their daffy predictions about Tesla's magnificent future. With 2019's cash-crunch averted, Tesla can now execute a titanic pivot away from being the world's most exciting car company to being a ... taxi service?

Yes, you read that right. It now sounds as if Musk has been captivated by the kind of money that Cruise, Waymo, and perhaps Uber are angling to rake in with autonomous ride-hailing. Tesla is talking about a million robotaxis on the road, with profit margins that would shame the traditional car business. 

OK, the profit thing is a legitimate consideration. Robotaxis could yield 30% margins, versus 10% for a solid mass-market automaker. There's a reason why a lot of players are entering the space.

But is there anything less sexy than robot taxis? Tesla made its name by producing the coolest electric cars ever. Before Tesla, EVs were glorified golf carts. Post-Tesla, they were guided missiles on four wheels. Tesla was the Ferrari of electrification.

Could Musk become so bored he steps down as CEO?

Musk now seems to want it to be a cyborg reboot of a beloved 1970's sitcom (What did Judd Hirsch know from Ludicrous Mode?). I've been covering Tesla for over a decade, and this latest Muskian move is downright depressing. It's also understandable; Musk is a quick study, and more than ten years at the helm of a carmaker has shown him that ... it's hard to make Silicon Valley money in the car business. He's good at math, and he may see many more trips back to Wall Street with hat in hand to ask for money to build ever more cars that might post narrow margins.

(I have nothing against robotaxi services, by the way — but Cruise and Waymo aren't pitching themselves as being sexy-cool undertakings, preferring to consider themselves massive, complicated engineering efforts, requiring immense human brainpower. In other words, the ultimate science projects.)

On the more encouraging side, if Tesla does pivot to being a robotaxi firm, Musk would be so bored out of his mind that he might, just might, turn over the operation to the constitutional bean counters who will be better at it than he is and step down as CEO, focusing his efforts of SpaceX and that aforementioned mission to Mars. 

If that's the endgame here, then the great robotaxi capital raise of 2019 would not just be the most boring $2.7 billion Tesla ever brought in, but the beginning of an Elon Musk renaissance that could allow him to make his own wish come true and retire on the red planet.

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NOW WATCH: Elon Musk says Tesla owners could make up to $30,000 a year turning their cars into 'robotaxis'

Contributer : Tech Insider http://bit.ly/2V3Z9Pz

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