[confiscate]

sounds like a misleading headline

The original letter says the 2.4 billion raised a few weeks ago, would be used up in 10 months at current burn rate.

It's for the money recently raised, not the entire company's bank account. Headline is misleading

[gamblor956]

No, the headline is accurate.

Of the $2.4 billion raised, about half must go toward servicing existing debt, and with the money they already had in the bank (about $900m), they have about $2.1b liquid cash to see them through the next 10 months, assuming the same burn rate (losing $200m/month).

[mikeash]

Isn’t that double counting the debt service payments?

[new_realist]

No, they have two large balloon payments due in 2019 from prior debt.

[confiscate]

I thought they had 2B in the bank before the raise.

Granted, I am sure Elon exaggerates numbers, but shouldn't that be factored in?

[trca]

Tesla had ~$2.5B in the bank before the capital raise, and are going to be receiving a multi-hundred million to $1B payment from Fiat Chrysler (https://www.ft.com/content/7a3c8d9a-57bb-11e9-a3db-1fe89bedc...) to offset their emissions. They have plenty of money in the bank for the foreseeable future, but they won't if they don't cut their expenses or increase sales. To me, this just looks like a company exiting startup wild-west spending and maturing into a full-fledged company with hard-set processes for company expenses.

[marcinzm]

Someone else in this thread has stated that a) around half of the raised money needs to be used to service debt b) Tesla had $900 million in the bank before raising money. Doing the math based on the letter's $200 million/month loss rate that comes out to 10 months before Tesla is utterly out of money.

Are those statements incorrect?

[pbreit]

No. The 10 months was based on the $2b+ raised. Tesla reported another $2b+ in cash at end of Q1.

The shorts are everywhere and they are not reliable.

[new_realist]

Tesla's cash balances are always higher and the end of the quarter, when they draw on the ABL while also selling a mass of cars that serve as collateral for the same ABL. Look at the interest they earn each quarter to get the average cash balance.

[gamblor956]

The 10 months is based on the $2b raised and Tesla's cash on hand and is based on unbiased analysts (i.e., not short or long on Tesla).

[confiscate]

Wait where are the links to these analysts?

The original post and every article online is citing Elon's email

Sensational headlines declaring Elon says Tesla will die, are headlines that generate clicks and views

[houqp]

Exactly this, they still have around 2b cash before that capital raise.