Tesla Releases Model 3, Automaker Struggles to Keep Up With Demand
08 August, 2017, 00:46 | Author: Rolando Keller
Electric carmaker Tesla has revealed plans to raise $1.5bn (£1.15bn) in its bid to fund incremental production of its new Model 3 vehicle. Kallo recommends investors to own Tesla stock going into the model 3 ramp, adding that a positive reception from early buyers could significantly increase the value of brand Tesla.
Tesla Inc. (NASDAQ:TSLA)'s stock had its "underperform" rating reissued by equities researchers at Bank of America Corporation in a report released on Thursday.
Expenses related to the Model 3 launch are at a high point right now, said Bill Selesky, an analyst with Argus Research.
The company said a week ago that it was averaging 1,800 reservations for the new auto each day.
However, the company is facing a major challenge in the "considerable execution risks associated with the rapid ramp up in production of a totally new vehicle", he said. "Then you'd go back to the equity markets and hope it's not too late" to raise more money. Tesla burned through a record $1.16 billion in cash in the second quarter, driven by spending on production capacity for the auto and batteries.
The entrepreneur's comments came after Tesla announced its second-quarter financial results, revealing revenue of $2.8bn (£2.1bn) and a loss of $2.04 per share.
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Indeed, the plant reached 500,000 cars faster than any other plant in Toyota history, and past year it won a coveted J.D. Toyota originally planned to move Corolla production to Guanajuato, thus freeing up Blue Springs for Tacoma production.
Tesla began delivering on a dream to make an electric auto for the masses, rolling out the first of its keenly-awaited "Model 3" cars, aiming to disrupt a world accustomed to automobiles powered by pollution-spewing fossil fuel.
Tesla also is involved in installing solar-paneled roofs and producing batteries that can store the energy and power homes.
The company reported $3.04 billion in cash and equivalents at the end of the second quarter and $7.12 billion in long-term debt and $2.26 billion in other long-term liabilities.
Ultimately, the depth of investor interest will determine the bond's interest rate. But Ebitda is set to more than double next year to $2.2 billion and then nearly triple by 2020, according to Thomson Reuters data.
When Musk was asked last week if he would like to raise more cash as a buffer, he said the company was considering a debt offering but not an offering of stocks.
Goldman Sachs, Morgan Stanley, Barclays, Bank of America-Merrill Lynch, Citigroup, Deutsche Bank and RBC were some of the institutionals participating in the fund-raising round. On average, analysts forecast that Tesla Inc. will post ($6.15) earnings per share for the current fiscal year.
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The woman, aged 20, arrived in the Italian city to take part in a photo shoot but was abducted and held for five days. A British model was abducted in Milan and put up for auction online after being lured to a sham photoshoot.
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Amusements of America, the company that provides rides to the state fair, said its staff also had inspected the ride. The family of the man who was killed is pursuing a wrongful death lawsuit in connection with the accident.
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