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Tesla Faces $920 Million Cash Call
Tesla Inc. must make a $920 million debt payment on March 1 unless its share price zooms more than 20% by then.
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Tesla Inc. must make a $920 million debt payment on March 1 unless its share price zooms more than 20% by then.
The payment will be on convertible bonds issued to Tesla in 2014, notes Bloomberg News. It says Tesla could exchange the note for cash and stock—if the company’s shares achieve a 20-day average value of about $360 by then.
Tesla’s share price reached $376 in mid-December. But it slid to $300 on Jan. 3, then rallied to $347 on Jan. 17 and retreated to $287 last week. Tesla shares opened today at $300.
Bloomberg notes that Tesla has the cash to cover the bond payment. The company reported $3 billion in cash and equivalents last September and is expected to report a gain of more than $400 million in the fourth quarter of 2018.
Analysts say Tesla would prefer to conserve cash by converting the bonds. Even so, the company plans to settle with a 50:50 mix of cash and stock, according to Bloomberg.
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