
Elon Musk Makes $82B Gambit to Silence Tesla Critics - matco11
https://www.bloomberg.com/news/articles/2018-08-08/for-elon-musk-an-82-billion-gambit-to-silence-telsa-s-critics
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vannevar
If the company needs a massive infusion of cash (as many analysts believe),
and obtaining it from a public offering or large investors is not possible at
a valuation Musk is comfortable with, he has little choice but to write a big
check himself under cover of taking the company private.

~~~
nickik
I think they story that they need a 'massive infusion of cash' is simply
false. I have no idea why anybody would believe that. It is not in accordance
with their own guidance or what we know from their production numbers and
cashflow numbers.

~~~
vannevar
_I have no idea why anybody would believe that._

Well, a few reasons are listed in articles like this:
[https://www.bloomberg.com/graphics/2018-tesla-burns-
cash/](https://www.bloomberg.com/graphics/2018-tesla-burns-cash/)

It's clearly not false to state that the company will need a lot of money to
scale going forward, compared to the money needed in the past. The only
question is whether that money comes from revenue, debt, or investment. The
revenue projections don't come close to covering it in the short term, and the
company has already taken on quite a bit of debt with respect to its assets,
making it unclear whether it could get loans for the amount of cash needed to
scale up to "real car company"-sized manufacturing capacity.

Maybe they don't need money, and Musk is just taking advantage of
undervaluation to make a great deal. But it's certainly not crazy to think
that they do need money, and if so, taking the company private may be the only
viable option.

~~~
dnomad
> Maybe they don't need money, and Musk is just taking advantage of
> undervaluation to make a great deal. But it's certainly not crazy to think
> that they do need money, and if so, taking the company private may be the
> only viable option.

This doesn't make any sense. Companies don't go private because they need
money unless it's a private buy-out. There is no indication at all that TSLA
would have any trouble accessing the debt markets. In fact what we see is TSLA
turning _away_ investors like the Saudis who are eager to increase their
exposure to the firm. If TSLA was so desperate for money why would they be
turning away some of the biggest investors in the world?

~~~
anthonybsd
> There is no indication at all that TSLA would have any trouble accessing the
> debt markets.

Actually there are a lot of indications that junk bond markets have little
appetite for Tesla offerings:

[https://www.bloomberg.com/news/articles/2018-03-28/tesla-
bon...](https://www.bloomberg.com/news/articles/2018-03-28/tesla-bonds-down-
to-86-cents-start-to-flash-warning-signals)

[https://www.thestreet.com/investing/tesla-junk-bonds-
sending...](https://www.thestreet.com/investing/tesla-junk-bonds-sending-
powerful-market-signal-14643694)

