• 1 day Institutional Movement Reinforces Bullish Sentiment In Crypto Markets
  • 2 days $100M Saudi Payment For Syria Fails To Help ‘Davos in the Desert’
  • 2 days Supply Issues Weigh On Pot Stocks As Canada Goes Legal
  • 2 days CME Bitcoin Futures Surge As Bullish Sentiment Grows Louder
  • 2 days How Do Your Savings Stack Up To The Top 1 Percent?
  • 3 days Amazon Favored To Win $10 Billion Pentagon Contract
  • 3 days American Steel Downgraded As Trade War Escalates
  • 3 days From Gold To Bitcoin: The Evolution Of Money
  • 3 days Italy Budget "Not Compatible With Commitments That Exist In The EU"
  • 4 days U.S. Deficit Defies Economic ‘Boomtime’
  • 4 days Saudi Business At Stake Over Journalist Murder Allegations
  • 4 days Trump Bails On Coal Industry Incentives
  • 4 days Google Opens Up About "Project Dragonfly"
  • 5 days Retail Sales Rebound, But Is It Enough To Post Positive Earnings?
  • 5 days Stocks Continue To Slide As Economic Fears Fester
  • 5 days Where Does The True Value Of Gold Lie?
  • 5 days Bitcoin Soars Amid Tether Drama
  • 6 days Fake Cheese, Hooters, And Big Banks: The Millennial Market Hitlist
  • 7 days “Enormous Piles Of Cash” Are About To Return To The Market
  • 8 days UAE Approves ICOs As Equities Markets Lose Momentum
Time To Buy A Lada? Russian Auto Sales Are Booming

Time To Buy A Lada? Russian Auto Sales Are Booming

Russia’s flagship carmaker was once…

EU Weighs New Payment System With Iran To Skirt U.S. Sanctions

EU Weighs New Payment System With Iran To Skirt U.S. Sanctions

Demonstrating its eagerness to continue…

  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