Monday, 21 August, 2017

Elon Musk celebrates Tesla Model S record-setting mileage trip

Tesla Model X Home News NewsTeslaThe Green Report Tesla drops the Model X price to $79,500 By Marc Carter
Cecilia Poole | 08 August, 2017, 00:24

The cash-burning ways of Tesla Inc (NASDAQ:TSLA) have always been one of the biggest arguments flung by those who are bearish on TSLA stock.

Tesla Inc said on Monday it would raise about $1.5 billion through its first-ever high-yield junk bond offering, as the US luxury electric auto maker seeks fresh sources of cash to ramp up production of its new Model 3 sedan.

The electric-car maker will sell senior unsecured debt obligations set to mature in 2025.

A team of Italian Tesla (TSLA) owners have just made auto history, driving a Model S P100D electric vehicle 1078 kilometers (670 miles) on a single charge.

Evan Niu, CFA owns shares of Tesla.

The Tesla Model 3 is here - and it's like no auto you've seen.

The company reported $3.04 billion in cash and equivalents at the end of the second quarter and $7.12 billion in long-term debt and $2.26 billion in other long-term liabilities. "The market should want to give innovative companies more capital as long as they perform, and Tesla is clearly performing". Specific interest rates and redemption prices are yet to be determined but this move hasn't been too worrisome for investors.

More importantly, model 3 demand failed to dampen/cannibalize demand for the higher priced Model S/Model X cars, which was outlined by Tesla as a key risk going into the model 3 launch.

Some observers have predicted that the company, which has yet to make a profit, will use up at least $2bn this year, hence the need for more cash. Cars powered by green energy are consistent with a concern for the environment seen in Musk's other enterprises.

TSLA stock, which has risen some 14% over the past month, is hardly reacting to Monday's announcement, down just fractionally after a few hours of trading.

The company said it used up $1.16 billion of cash during the quarter, but it has $3 billion cash on hand, enough for "sufficient liquidity". That's still a good place to be from a cash perspective, and it nearly guarantees that Tesla will sell all of the vehicles it can produce not only this year, but also for all of 2018. The vehicle's battery was created to keep it going for "at least 215 miles" (345 kilometers) before needing to be recharged, according to Tesla. The company receives about 1,800 net orders a day for its mass-market electric vehicle, Musk told investors on Wednesday, putting total net reservations at 455,000. The company delivered the first 30 to buyers July 28, all of them Tesla employees.

The report comes days after the company began selling its long-awaited Model 3 [pictured above], which the earnings release called "a huge milestone".

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