Exciting car company Tesla may require as much as $10 billion in additional principal by 2020 to fund the company’s operations, according to Goldman Sachs.
“We confidence in this level of capital transactions may be funded through multiple avenues, subsuming new bond issuance, convertible notes, and equity,” analyst David Tamberrino spoke in a note to clients Thursday. “We see several options available to the company to refinance mellowing debt and raise incremental funds, which should allow Tesla to repository its growth targets.”
While Tamberrino was confident CEO Elon Musk won’t bear trouble acquiring the extra cash, the infusion will likely pourboire its own costs. Issuing additional debt could weigh on the company’s ascribe profile, while supplying more stock or convertible bonds determination dilute current shareholders.
Tesla declined to comment for this recounting.
Despite the forecast for additional capital requirements and a sell rating from Goldman, Musk asserted as recently as May 2 he has no intention of raising new money.
Asked earlier this month if he’s mulling a extraordinary raise, Musk simply said “no.”
“I specifically don’t want to,” he said on a bull session call after Tesla posted first-quarter earnings that fustigate expectations.
Tesla finished the quarter with roughly $2.7 billion in the bank, down from a equality of $3.4 billion at the end of 2017. The persistent cash burn has kept analysts relish Tamberrino unconvinced that the Palo Alto, California-based company can maintain going at this pace without a larger financial cushion while sharp sellers keep the heat on the company’s equity.
Tesla shares are down 8 percent this year and precise Wednesday at $286.48, giving the automaker a market value of $48.6 billion.
Tamberrino feels the stock price will fall to $195 over the next six months, a 31 percent flag. The stock was trading slightly higher Thursday morning, at $286.59.