iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
18,220 Blog Posts

Goldman: Tesla is Fucked, Company Needs $10 Billion to Remain Solvent

I’ve never seen a company being targeted like this. Elon Musk must be on some sort of banker kill list. Maybe he fucked one of their girlfriends, or perhaps stole some engineers from someone important. Say what you want about Tesla, it’s comical to see the media attempt to ruin them on a daily basis, showcasing each and every car accident, making it headline news, as if a fucking plane just crashed into the Empire State building.

Sure, Tesla needs cash — but has any of these losers bothered to look at the fucking share price?

This is a $50b company. They can raise $10b today in a secondary if they absolutely wanted to.

Here’s Goldman, fear mongering by pretending Tesla doesn’t have the immediate means to raise capital — tossing out a $10b number as if this were some sort of sub prime lending capital call.

Source: CNBC

“We believe this level of capital transactions may be funded through multiple avenues, including new bond issuance, convertible notes, and equity,” analyst David Tamberrino wrote in a note to clients Thursday. “We see several options available to the company to refinance maturing debt and raise incremental funds, which should allow Tesla to fund its growth targets.”

While Tamberrino was confident chief executive Elon Musk won’t have trouble acquiring the extra cash, the infusion will likely present its own costs. Issuing additional debt could weigh on the company’s credit profile, while supplying more stock or convertible bonds would dilute current shareholders.

Despite the forecast for additional capital requirements and a sell rating from Goldman, Musk insisted he has no intention of raising new money as recently as May 2.

Asked earlier this month if he’s mulling a capital raise, Musk simply said “no.”

“I specifically don’t want to,” he said on a conference call after Tesla posted first-quarter earnings that beat expectations.

Tesla finished the quarter with roughly $2.7 billion in the bank, down from a balance of $3.4 billion at the end of 2017. The persistent cash burn has kept analysts like Tamberrino unconvinced that the Palo Alto, California-based company can keep going at this pace without a larger financial cushion while short sellers keep the heat on the company’ equity.

Tamberrino believes the stock price will fall to $195 over the next six months, a 31 percent decline.

Great, more nothing. I can’t wait to see TSLA shorts roasted on a spit.

If you enjoy the content at iBankCoin, please follow us on Twitter

12 comments

  1. TJWP

    Tesla is going to zero, which is fair value.

    • 0
    • 0
    • 0 Deem this to be "Fake News"
    • Dr. Fly

      I’d bet my entire account you’re wrong.

      • 1
      • 0
      • 0 Deem this to be "Fake News"
      • TJWP

        I was being snide and hyperbolic more than literal. I’d be more than happy to concede that point… eventually. Long term Elon can probably roll them up into another government subsidized company, but for the rest of the year I’ll stick to my Jan 2019 puts.

        We recently got some of their battery wall technology, absolute garbage. You have to start replacing individual units after 9 months if you use them for reactive support on the grid, which is super environmentally friendly when you look at how lithium is mined. Oh also the capacity factor is shit if you consider the draw down time is 2h but the charge time is 8-10h meaning you need to install 4-5x the battery capacity (as compared to simply building a combined cycle fast firing Diesel generator which preforms the same function for system stability). Won’t stop California from going HAM but honesty its more efficient (and environmentally friendly) to just pump water uphill to store electricity.

        Don’t know shit about their cars other than they look like tinderboxes dead set on murdering you with the autopilot.

        • 0
        • 1
        • 0 Deem this to be "Fake News"
  2. jbandy

    Fully agree with you Fly. Wall Street and the media shit on TSLA on a daily basis out of pure animus.

    • 0
    • 0
    • 1 Deem this to be "Fake News"
    • probucks

      Media and Wall Street were sucking their cock for the longest time. This shit-storm is a recent occurrence.

      Thant being said – Telsa is a shit company that will have a sub $100 stock price very soon.

      • 0
      • 0
      • 0 Deem this to be "Fake News"
      • acehood

        1000 before 100. Just like NVDA.

        • 0
        • 0
        • 0 Deem this to be "Fake News"
        • numbersgame

          Doubt that, but confidant on $200 before $500.

          NVDA has been manufacturing chips for decades. TSLA doens’t have a clue about manufacturing. I’d bet that instead of grabbing expereinced industrial/plant engineers from the automotive industry, they just said “Robots” and decided that they knew better than “low tech car guys.”

          The Model S is a premium sedan that can demand premium prices. The Model 3 doesn’t know what it wants to be: it is losing money if it competes agaisnt non-luxury electrics or hybrids at the $30k price point, and at $50k it becomes another premium model without the cachet of the Model S. When you add in the manufacturing woes, the Model 3 will not be Tesla’s savior.

          What really matters is the Commercial Truck. If the perfomance matches Tesla’s stated specs (range+ cargo) and the price point is reasonable (and autodrive doesn’t crash into giant-ass fire engines anymore), then it could be a game-changer.

          However, in the near term, Musk setup himself up for failure: it’s compeltely obvious that they will need to raise moeny, which isn’t a huge deal. However, Musk couldn’t keep his big mouth shut, so now his integrity is on the line. That’s much more important than the cash raise for a brand such as Tesla.

          • 0
          • 0
          • 0 Deem this to be "Fake News"
          • tonka

            I’d bet that the base level Model 3 is never made, beyond a few to show that they can do it.

            The semi truck is years away. Sure they could raise 10 billion right now if they wanted to. But they’re on pace to lose a lot more than 10 billion before a truck ever hits the road.

            • 0
            • 0
            • 0 Deem this to be "Fake News"
  3. tonka

    My only concern is that Musk might actually be going crazy. Every genius that shoulders the worlds problems by themselves eventually gets crushed. When he goes on Twitter and says that they won’t raise cash and will be cashflow positive, how is that taken any other way than official company guidance? If I was a lawyer I’d be licking my chops.

    But I’m not, so for the time being the options IV is so jacked that I will sell OTM call spreads every week until they do a secondary.

    • 0
    • 0
    • 0 Deem this to be "Fake News"
  4. og

    I remember the shit storm of Tesla killing people in fires. That was around the $160s?

    • 0
    • 0
    • 0 Deem this to be "Fake News"
  5. juice

    Goldman must have an important hedge fund client that is short up the wazoo.

    • 0
    • 0
    • 0 Deem this to be "Fake News"
  6. masteroneass

    They are not a profitable company and never will be. Therefore they will bleed money until bk. End of story.

    • 0
    • 0
    • 0 Deem this to be "Fake News"