CuriousSunbird
Member
You are correct that if the stock price is above 359.87 in Feb the liquidity issue is eased (albeit at a slight dilution cost).Gotcha. I pulled up the Q4 report again and see which lines you are working from. They also have 10 billion in vehicle and solar leases that I believe could be monetized sooner if needed (of course those are offset by long term debt at some timing/ ratio).
I'm not fully up on how convertible notes work, but it seems like if things go well and Q3,Q4 are profitable, the stock will likely be above the conversion price of $359.87, so no need for cash (turns into stock). The $566 million due 11/2019 may not though due to the $759.36 conversion price. However, at that point, there should be many quarter in the black and funding, if needed, will be available.
Monetization of the vehicle leases is already happening (they securitized $500 million a couple of months ago), but it has the downside of reducing future revenue - you don't get the rent on the leases you sold. Still it can help with liquidity. Many of us who read the financials are waiting to see if the new accounting standard gives more clarity on what is left to be sold - it will take effect with this quarter. An issue here is that a lot of the sales have been with Tesla residual value guarantees - as the credit worsens, the investors charge more to take that risk.
The solar leases are partially monetized through a combo of VIEs, solar notes and subsidiary loans. They are complicated to value (the b/s is cost less depreciation, not market value) and also have the credit issue - Tesla has guaranteed certain performance levels to some customers.