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Is Tesla Motors in serious financial trouble?

Discussion in 'Tesla Motors' started by Tom, Jun 5, 2010.

  1. Tom

    Tom New Member

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  2. Doug_G

    Doug_G Lead Moderator

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    Probably Musk is trying to make himself look poor for the divorce...
     
  3. PopSmith

    PopSmith Saving for a Model 3

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    Elon's 'I'm broke' statement isn't very well timed. However, I don't believe Tesla is in too serious of financial trouble yet. As long as the Toyota deal for NUMMI goes through they can use the AVTM loan, if needed, to retool the factory and commence building Model S.

    Very worst-case scenario is Tesla isn't able to go public before the end of the year and then goes under due to not being able to get the funds, from anywhere, to purchase and tool NUMMI.

    However, more than likely Tesla will go public sometime before December 31st 2010 to complete the deal with Toyota for NUMMI. Upon announcing the IPO date reservations for the Model S will increase, perhaps greatly, and P1 of the Model S will roll out of the factory around April-June 2012.
     
  4. Iz

    Iz EVs are here to stay

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    Good analysis PopSmith. Hope you are correct. The article does not imply a death sentence. It would be great if some of those lurking TM employees with additional information would post their feedback as well.
     
  5. WarpedOne

    WarpedOne Supreme Premier

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    Divorce?
    What, sportscars and rockets doesn't make him alpha male enough for Mrs. Musk?:eek:
     
  6. mt2

    mt2 Member

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    Just to be clear; while it's possible that Toyota won't follow through with the deal after December 31 if Tesla does not go public by then, the terms of the agreement were that Toyota would renegotiate. Even the Tesla spokesperson said it was just common sense.

    So while your very worst-case scenario is true, it's unlikely. I figure a more likely worst-case (not very worst-case) is that Toyota renegotiates at a lower amount that still allows Tesla to pick up the NUMMI plant.
     
  7. PopSmith

    PopSmith Saving for a Model 3

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    Thanks. :biggrin:

    Thanks for letting me know about that clause, while it does make absolute common (and business) sense to have a renegotiation clause written in to the deal with Toyota I wasn't aware of it.

    Tesla knows they have to have the Model S off the assembly line around mid-2012, or possibly earlier, and clearly took steps in the deal with Toyota to insure it can happen even if they can't go public before the end of 2010.

    Yes, my very worst case scenario is unlikely, even extremely so, but I felt I needed to bring it up.
     
  8. DRM

    DRM Roadster #619

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    Just a thought: Wouldn't Tesla be able to use the DOE money to purchase NUMMI, at which point the $50M Toyota investment would become unrestricted free cash? I know the DOE loan had quite a few strings attached in terms of what it could / couldn't be used for.

    //dan.
     
  9. Iz

    Iz EVs are here to stay

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    There may be some restrictions on the DOE loan. I may have read somewhere the funds were to be used for plant upgrades only. Not certain if that includes the purchase of a location.

    TM will not receive any investment from Toyota until after the IPO at which point the $50M may not be as important to them.
     
  10. Palpatine

    Palpatine Banned

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    I think Elon is just pleading "cash" poverty for the divorce.

    The legal documents don't say that he is broke. They indicate that he is quite wealthy with a lot of illiquid investments in Tesla Motors, SpaceX, Solar City and multiple limited partnerships, hedge funds, etc.

    Most of those investments cannot be turned into cash without major tax consequences or early withdrawal penalties.

    With the successful launch of Falcon 9, the SpaceX investment likely increased in value dramatically on paper. The future government and private commercial launch contracts are valued in the billions of dollars.

    Elon is not poor at all. He is likely worth over $500 million. He just lacks cash at the moment.

    This is relevant for the purposes of establishing monthly child support.
     
  11. CarbonOne

    CarbonOne Banned

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    With out even reading it, and correct me if I'm wrong because i'm not too familiar with this car brand yet.

    But I don't see how its possible since they have deals with Toyota and GM for something or other. And they have plenty of private investors. Right?

    :confused:
     
  12. graham

    graham Active Member

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    Betting on a new car company failing in the US is always a good bet.

    However, it is not correct to say that because a CEO of a company is having financial trouble, it must mean the company itself is having trouble as well.

    Chances are good Tesla will fail because chances have always been good that Tesla will fail. However, I doubt the company is in any worse financial position today than it was in, say, January 2009.
     

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