ibusinesslines.com
ibusinesslines.com September 21, 2018


Forget the stock. Tesla's bonds are imploding

15 September 2018, 12:01 | Jodi Jackson

Data sources GoodCarBadCar InsideEVs

Data sources GoodCarBadCar InsideEVs

CEO of Tesla has previously noted how the paint shop at the Fremont factory has become a bottleneck for their ambitions production plans. Founder and CEO Elon Musk's public behavior has been increasingly erratic - leading to calls for him to step aside - and the company has consistently missed production milestones for its Model 3, the auto that was supposed to turn Tesla into a high-production, mass-market automobile manufacturer. Tesla's head of investor relations Martin Viecha facilitated the tour, while also provided some updates on the company's upcoming projects. It's hard to sell electric cars.

The good news is that Tesla is rapidly ramping up Model 3 production, which could take financial pressure off the company. In late August, Musk acknowledged that paint has been a challenge.

Elon Musk's prediction last July that the Model 3's production hell is coming to an end seems to be ringing true.

Before that, Musk pronounced in early August that he would take Tesla private, but backtracked on that proposal two weeks later. The fiasco reportedly sparked an SEC investigation into the accuracy of Musk's "funding secured" tweet.

Tesla's decline has been driven by accelerating "management credibility issues", Needham & Co. analyst Rajvindra Gill wrote in a report on Monday.


But recent moves show they are keen to get as many Teslas on the road as possible.

Tesla stock tumbled again last week after the company's chief accounting officer suddenly resigned after less than a month on the job. "We believe Tesla could consider an auction for its shares in the private equity market, financed by existing shareholders, new strategics, divestiture of valuable captive assets (Tesla autonomous/shared), and possibly some help from SpaceX".

"They can expect, I think, a substantial amount of people pulling their reservations", Acevedo said. The company said in its second-quarter earnings letter this year that it expects to post consistent profits starting in the third quarter, and the high-end Model 3s generate better margins than the base model would.

There have also been a series of freaky tweets from Musk, several accusing the diver who saved the boys' soccer team trapped a waterlogged cave in Thailand of being a pedophile.



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