Do you guys think Tesla survives 2018? 2019?
Do you guys think Tesla survives 2018? 2019?
Jordan Kelly
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Brayden Davis
Nope.
Kayden Long
>what is fud?
>what is the Automotive industry
Caleb Carter
They’ll make it through this year, but maybe not 2019.
Tesla has almost $1B of debt coming due between now and February 27. The debt is convertible at $360/share, so if the share price is above 360 the debt holders will convert and no cash will be required to retire the debt. That was Tesla’s plan.
If the share price doesn’t recover by February, the company will need to pay the bond holders. Unless there’s a dramatic change in cash burn, they won’t have the cash to pay off the bonds.
Now, without the SEC charges, Tesla could roll the debt over. It would be expensive, as rates have risen in general and Tesla’s credit rating is trash...but they could do it. The problem is that companies under SEC investigation are prohibited from raising capital (either through bond issuance or share offering). So they have no access to capital to make that February debt payment.
Musk kept saying there would be positive earnings and cash flow in Q3 and Q4. Analysts don’t agree, but share holders better hope so. If they lose more than $800m in cash over the next 3 quarters, they will default on their debt. And then it’s bye-bye Tesla.
Ayden Thompson
Analysts have said that due to a massive production push, combined with a massive delivery push they are likely to beat the car delivery estimates.
David Sullivan
Sure
Isaac Taylor
i just sold for a 20% loss. So yes this shit is going to skyrocket past 400 a share in less than a week now.
Wyatt Gutierrez
Delivery estimates and free cash flow are not the same thing. A lot of the vehicles being delivered over the last quarter had deposits placed on them. Meaning the cash was already on Tesla’s balance sheet. Every Model 3 they sell that was held by deposit generates very little, if any, free cash flow.
They also played some games with cash flow statements in Q2. They showed an improvement to cash burn in Q2, but digging into the balance sheet shows it was likely smoke and mirrors. They drew on a line of credit and deferred payments to vendors to make it appear that they only burned 150m in cash. Those vendors likely want to be paid.
I’m not saying that Tesla is definitely sunk, but there are major issues that could affect their ongoing solvency. I sure wouldn’t pay $270/share for this shitshow.
Justin Wright
tesla can die and nothing was lost, spacex is where all the really interesting tech will come from anyway
Nicholas King
During the next financial crash (coming soon) musk will unironically become bankrupt and probably end up in jail.
But due to this massive bullshit federal reserve ponzi market, Tesla will manage to stay alive until then. Money is just too cheap