• 348 days Will The ECB Continue To Hike Rates?
  • 349 days Forbes: Aramco Remains Largest Company In The Middle East
  • 350 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 750 days Could Crypto Overtake Traditional Investment?
  • 755 days Americans Still Quitting Jobs At Record Pace
  • 757 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 760 days Is The Dollar Too Strong?
  • 760 days Big Tech Disappoints Investors on Earnings Calls
  • 761 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 763 days China Is Quietly Trying To Distance Itself From Russia
  • 763 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 767 days Crypto Investors Won Big In 2021
  • 767 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 768 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 770 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 771 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 774 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 775 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 775 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 777 days Are NFTs About To Take Over Gaming?
Zombie Foreclosures On The Rise In The U.S.

Zombie Foreclosures On The Rise In The U.S.

During the quarter there were…

Another Retail Giant Bites The Dust

Another Retail Giant Bites The Dust

Forever 21 filed for Chapter…

The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

  1. Home
  2. Markets
  3. Other

Goldman: Tesla May Need To Raise $10B By 2020

Tesla

Elon Musk says that Tesla won’t need to raise money this year, but by 2020 the company may need to raise more than US$10 billion to fund its ambitious growth targets, according to Goldman Sachs.

“We see several options available to the company to refinance maturing debt and raise incremental funds, which should allow Tesla to fund its growth targets,” Goldman Sachs analyst David Tamberrino wrote in a research note on Thursday.

Tesla won’t have troubles raising the money but “issuing incremental debt (including priming current creditors with secured debt) may weigh on the credit profile of the company while issuing additional equity or convertibles at lower premiums would dilute current shareholders,” Tamberrino wrote.

The analyst has a ‘sell’ rating on Tesla shares, and expects the stock to plunge to $195 over the next six months—this would be a 32-percent slump from Thursday’s opening price at $286

Goldman’s note comes amid a major reorganization at Tesla that includes streamlining activities and functions to improve its performance, and an exodus of senior executives in recent months.

In early April, Tesla said that it “does not require an equity or debt raise this year, apart from standard credit lines,” while Musk tweeted a couple of weeks later that Tesla would be profitable and cash flow positive in Q3 & Q4, so there was obviously no need to raise money. Related: Trump's Trade Dilemma: Export Growth Or National Security

Analysts have been wondering if Tesla may need to tap capital markets as early as this year, considering the high cash-burn rate and the bottlenecks in the ramp-up of the Model 3 production.

On the conference call after another record loss for Q1 (yet narrower than expected), Musk reiterated that Tesla won’t need to raise funds this year.

“I specifically don’t want to,” said Musk, asked about whether he would soon consider raising more money.

By Tsvetana Paraskova for Safehaven.com

More Top Reads From Safehaven.com:

Back to homepage

Leave a comment

Leave a comment