What's your take on Tesla?

What's your take on Tesla?

Author
Discussion

WindyCommon

3,378 posts

239 months

Monday 8th October 2018
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This - as my former boss would have said - is NOT a good situation.

$5bn in senior secured debt (as suggested) would be kryptonite for Musk, and all other equity holders.


DonkeyApple

55,328 posts

169 months

Monday 8th October 2018
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If they do end up needing more debt then the debt holders could be hugely aggressive in locking out new lenders and use the situation to use their existing debt plus the required additional debt to all but eradicate equity holders. It’s a very extreme situation but as Musk is an equity holder then he does face having his holding wiped out in a restructure and refinancing.

Einhorn’s remarks have been interesting also. Obviously he is talking his own book and while I don’t see his claimed total analogy with Lehmans there are some stark similarities that are all too common in the final history of many large corporate failures.

Musk’s refusal to raise funding back when he could, breaking the cardinal rule of the markets to raise when you can never when you need to could transpire to be the key failure around which Tesla continues to make cars with new shareholders and new management.

I guess so much rests on whether they have been able to get enough product out the door for more than it has cost so they can show the markets that there is hope that a restructure won’t be needed.

shopper150

1,576 posts

194 months

Monday 19th November 2018
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Everything's is Red - TSLA is holding up.......