Connect with us

Hi, what are you looking for?

CleanTechnica
Tesla air pollution
Efficient Tesla cars charging. Photo by Zach Shahan, CleanTechnica.

Cars

This is Why Tesla Halted $1 Billion Bond Raise (Opinion)

Should shareholders who are long TSLA care about Tesla’s bond halt?

Tesla recently made the financial news again by halting a more than $1 billion offering of bonds that were backed by leases on its EVs. This made Tesla the third issuer to halt a sale in the midst of a bit of market turbulence, Bloomberg reported. Rich Smith shared his thoughts about this while pointing out that Tesla didn’t really need to issue those bonds anyway.

In a blog post for The Motley Fool, Smith noted that Tesla halting the bond sale meant that it won’t be able to get access to all $1 billon of the expected funds being raised. However, this is proving to be a smart move for Tesla since it won’t be surprised by the high-interest rates that it would have to pay on those bonds. Smith also pointed out that it doesn’t really need the cash from these bonds right now anyway. He wrote:

“According to the latest data from S&P Global Market Intelligence, Tesla’s balance sheet boasts $17.7 billion in cash against only $8.9 billion in debt. And with strong free cash flows of $3.5 billion generated over the past year, the company really isn’t hurting for cash at all. Tesla’s entirely capable of self-financing.

“Maybe the real story here really isn’t the obvious headline: ‘Tesla had to suspend its bond offering.’ Maybe the real story is that Tesla’s balance sheet is so rock solid that it didn’t need to issue bonds in the first place — and that’s the good news that is driving Tesla stock higher.”

Tesla shareholders who actually care about the company and invested in it for the long run know this, and perhaps this is why Tesla keeps doing better than expected despite the so-called “bad news.”

That’s our take, anyway — what’s yours? Head on down to the comments section at the bottom of the page and let us know if this “bad news” changes the way you look at Tesla’s stock prices.

 
Check out our brand new E-Bike Guide. If you're curious about electric bikes, this is the best place to start your e-mobility journey!
 
 
Appreciate CleanTechnica’s originality and cleantech news coverage? Consider becoming a CleanTechnica Member, Supporter, Technician, or Ambassador — or a patron on Patreon.
 
Have a tip for CleanTechnica, want to advertise, or want to suggest a guest for our CleanTech Talk podcast? Contact us here.

Advertisement
 
Written By

Johnna owns less than one share of $TSLA currently and supports Tesla's mission. She also gardens, collects interesting minerals and can be found on TikTok

Comments

You May Also Like

Clean Transport

The Tesla CEO's allure transcends his millions of fans and includes other CEOs, who have been drawn to his innovative compensation package.

Cars

Tesla’s Autopilot team recently visited New Orleans for the Conference on Computer Vision and Pattern Recognition (CVPR). Ashok Elluswamy, Tesla’s Director of Autopilot Software,...

Cars

BYD is an interesting company. It’s like a very distant, very neglected cousin of Tesla. Tesla and BYD have grown their plugin vehicle production...

Cars

Stellantis Shines In Europe — Plugin Vehicle Sales Report With the overall European car market still suffering, down 13% last month year over year...

Copyright © 2021 CleanTechnica. The content produced by this site is for entertainment purposes only. Opinions and comments published on this site may not be sanctioned by and do not necessarily represent the views of CleanTechnica, its owners, sponsors, affiliates, or subsidiaries.