Is tesla structurally unprofitable?

by dragontamer5788

No one knows “why” they lose money. All the cash-flow statements tell you is how much money they’re losing.

In the short-term, Tesla has a $920,000,000 loan that they need to pay back in March 2019, and a big question is… how do they plan to pay it back? This loan exists because Elon Musk borrowed $800,000,000 in 2014 for the company. Then they have a $1,380,000,000 loan they need to pay back on 2021, but that’s many years away so that’s not as big of a deal.

Obviously, Tesla needs to raise money. And frankly, Mr. Musk has been pretty good at raising money so far… either a new loan, or maybe selling stocks or what-not. In either case, the company doesn’t have a profit yet so they can’t use their (non-existant) profits to pay back this loan.


Oh right, and Tesla also needs to pay back this bond from Solar City (it bought SolarCity, and with it all the debt it had).

finra-markets.morningstar.com/BondCenter/BondDetail.jsp?ticker=C601325&symbol=TSLA4061268

That’s $230,000,000 due on November 1st 2018, less than a month from now.


I mean, its rather simple. They borrowed money a few years ago, and now they have to return the money. That’s about it, really.

 

They have $3 Billion in accounts payable, as of Q2 2018.

IE: They owe their suppliers $3 Billion, with only $2.24 Billion cash-on-hand… with a net loss of $742 Million in Q2 2018, $230 Million due November 1st 2018, and $920 Million due March 2019.


They allegedly have 27-Billion total assets and 22-Billion total liabilities.

But $10.9 Billion of their assets is factory equipment and real-estate. Its inconceivable for Tesla to sell off their factory equipment or real-estate, so already the company is under-water to some extent (they have to sell critical equipment / factories / etc. etc. to have positive value). Note that these 22-billion of liabilities include the bonds I described earlier (the 920 Million and 230 million loans are short-term liabilities)

 

 

Disclaimer: Consult your financial professional before making any investment decision.

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