Sci-tech

Tesla raising cash in push to get Model 3 to masses

Tesla raising cash in push to get Model 3 to masses

The Palo Alto-based carmaker announced a huge chunk of senior notes to help cure its waning cash position. The Tesla Model S was a regular production auto that featured standard low rolling resistance tires and the drivers ensured that vehicle stayed running for as long as possible.

Tesla Inc.is making its debut in the primary corporate bond market as Elon Musk bolsters his company's audacious bet on a more affordable electric vehicle.

Even without an unforeseen event, Tesla could use the cash.

The offer comes just two weeks after the launch of the Model 3, and the timing is no accident. So, what exactly does that mean?

Telsa has received an average of 1,800 advance reservations per day for the Model 3 since its launch in late July. The demand/supply gap is clearly in favour of Tesla.

Tesla wants to raise $1.5 billion to help with the rollout of its relatively affordable Model 3 electric vehicle. In fact, the actual scenario has been the exact opposite of what was feared. "We also continue to plan on increasing Model 3 production to 10,000 vehicles per week at some point in 2018", Tesla said in an update letter to investors. To meet demand, Tesla is expanding its Gigafactory in the Nevada desert and planning three more Gigafactory facilities further, to be announced in further detail later this year. Many Wall Street analysts seem to disagree. The success of the Model 3 could put in the rear-view mirror concerns about Tesla's prospects for growth. Tesla referred to the arrival of the Model 3 as a "crucial step" in the company's mission to speed the transition to renewable energy.

The Model X is now being produced at full clip, alongside the Model S at Tesla's facility in Fremont, California. (The) set a $190.00 price target on Tesla and gave the stock a sell rating in a research note on Monday, May 15th. Patience, though, has its rewards, as is the case with the Tesla Model X.

Goldman Sachs, Morgan Stanley, Barclays, Bank of America Merrill Lynch, Citigroup, Deutsche Bank and RBC are the book-runners on the bond offering, IFR reported. Savvy investors should see this as a sucker's bet.

How To Play Tesla Stock?

Welp, there is the drop in Tesla stock that Einhorn and his band of bears have been waiting for... If you believe Tesla will achieve these numbers, long Tesla is what you should be. 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. However, think twice before you short Tesla stock.


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