People on Wall Street are unsure if the massive company that is Tesla will be able to pay back the debt they owe. 1.8billion bonds are due in August 2025 and on friday they hit a new record low. Trading for 84 cents on the dollar. It had went down from being 98 cents just last year.
Experts are worried about Tesla. Not to mention that Elon Musk is doing literally whatever he can to get the Model 3 out fast enough, to turn a profit. In hopes to use that money to pay off that enormous debt.
The reason why Tesla had acquired so much debt was to put them self in the forefront at such a rapid pace in the auto industry for electric cars. But even though they may be one of the top companies, other big players such as Mercedes-Benz and Ford are gunning for them.
But that debt may soon backfire because it’s set to grow even more than 9 billion dollars before 2025. Including a total of 2.7 billion this year and next year. So it’s a bit alarming for them as of right now.
As of right now people are split down the middle if Musk will turn a profit or not. Some saying that pushing as hard as he is right now he will turn a profit. While others are saying he’s just digging his own grave.
Lately the way he has been acting too hasn’t been helping his cause. Musk is the face of all of his companies while calling a well-known man a pedophile and smoking a blunt on a podcast is concerning more people. Not to mention he was claiming on twitter that the he would go private selling shares at 420$. Then soon abandon that because it was then described internally as a shareholder revolt. That had led him into being investigated by the SEC.
On the 1st of August Musk had said that they plan on paying off the debt. Instead of Refinancing it. He had also put some rumors down by saying Tesla will need to raise cash soon by selling some stocks.
Experts are saying as of right now it’s going to be a uphill battle to raise money until the SEC investigation is over.