Can anyone explain to me how a business like Tesla pays back its lenders when their operating income has always been...

>Can anyone explain to me how a business like Tesla pays back its lenders when their operating income has always been negative?
My guess is it doesn't and it's a ponzi scheme. Musk is the new Kenneth Lay.

i have known grimes lol

It is

Amazon and tesla and such are much more of a problem than crypto ponzis etc

How is she irl?

net income of amazon is 3.03 billion

His graph's a few years old now. Not to mention that 3.03 is still barely above 0 on that scale

Essentially people are willing to lend him money because they believe that Tesla will inevitably print money. It's questionable that this will happen though especially without regulatory support. The mad man build a fucking mammoth factory in Nevada with most of it paid for by US tax dollars.

Yeah, but I meant specifically how he pays back bonds and bank loans since Tesla has done that in the past already, but they have always had a negative operating income. Amazon, for instance, has made money in the past 3 years. They've also had positive earning before tax, so they've been able to afford their debt through normal operations. In the past they couldn't, so they were similar to Tesla, which right now can't pay back their debt through money they make selling cars.

But I guess everyone else already answered, they are issuing equity and using that to cover their debt. Assuming they'd never be able to make money, that'd make them a ponzi, but I guess the only reason they aren't considered a ponzi by most people is because the assumption is that they will eventually make money.

Companies literally don't do this. It is a huge deal when they sell new stock and their shares tumble a ton.

Top kek

>But I guess everyone else already answered, they are issuing equity and using that to cover their debt.

Companies don't do that! They don't sell stock to pay off debt, they take out more loans.

ycharts.com/companies/TSLA/total_long_term_debt

You can see them continue to take out loans from $500 million in 2014 to over $10.7 billion today.

What is Musk doing then? He paid back his government loan, as well as previous bond issues. but as far as I can see the company can't even afford its general operating expenses last year. It doesn't have the money to pay its interest, but it isn't defaulting on it.

it's called a ponzi scheme

Ok, thanks for the response.

Wasn't Amazon putting most of their money in r&d initially? They've had a positive net income the past three years. So at least they're able to turn a profit.

Tesla is another story though. How people have fallen for that meme company hook, line, and sinker the way have surprises me. Then again, their customer base are retarded enough to believe recycling is actually affective, global warming exists, and the flashy lights in the tesla stores are enough to trick boomers into buying their piece of shit car.

Selling equity to pay ff debt would be a corporations last resort, the board of directors represent the shareholder interests and they surely don't want their holdings diluted by more stock issuance. They simply take out more loans to pay back earlier loans and operating expenses.

Ford has over $150 billion in loans, nearly 15 times what Tesla has.

Musk is under CIA control through MK ultra, everything is probably already paid for.

Plus we are probably in the largest bond bubble in recent history, this is unlikely to end well but for the time being everyone is able to get loans to run their companies and do share buybacks to prop up their share price.

I just looked up who the largest holders of US corporate bonds are and it seems like mutual funds are right under foreign buyers at the top. I'm assuming most of that is retirement money, which might be a bad assumption. Is the reason the bond market is so large because mutual funds feel compelled to put the money they're given somewhere, and big established corporations issuing bonds seems safe enough?

Central banks have flooded the world in money and cheap loans for the past 10 years. The money has to go somewhere, it is easy to see it flowing into real estate and stock markets because the prices increase. With bonds it is a little different, high bond prices cause the rates to fall. With low interest rates most lenders don't want to sit on a 10 year us treasury that won't even cover inflation so they are incentivized to lend to corporations. Corporations are now sitting on tons of debt that they won't be able to afford if rates start to rise, which it seems they already are.

And?!

Trish Keenan is /mu/s new girl
Grimes is too ugly anyway these days.

Attached: trish.jpg (544x419, 56K)