Saint Elon, your Polished turd is stinking.
March 28, 2018, 2:35 PM CDT Updated on March 28, 2018, 3:45 PM CDT
While stock drop gets the attention, bond rout has big risks
Company’s now in ‘negative feedback loop; everyone is worried’
Elon Musk’s creditors are suddenly having a serious bout of buyer’s remorse.
In August, they lined up for the chance to finance Tesla Inc.’s ambitious rollout of its Model 3 sedan. Wooed by Musk’s personal appeals, bond investors pretty much ignored the carmaker’s prolific cash burn and repeated failures to meet production targets and lent it $1.8 billion at record-low interest rates.
But now, after a spate of fresh setbacks in the past week, including a fatal Tesla crash and a credit-rating downgrade, bondholders are asking hard questions about whether Musk can deliver on his bold promise to bring electric cars to the masses before the company runs out of cash. On Wednesday, Tesla’s notes plunged to a low of 86 cents on the dollar, the clearest sign yet creditors aren’t totally sure the company will be money good.
https://www.bloomberg.com/news/articles/2018-03-28/tesla-bonds-down-to-86-cents-start-to-flash-warning-signals
