Early Tesla Investor Says Model 3 "Drives like a Porsche"

Early Tesla Investor Says Model 3

Earlier in the week, Elon Musk's luxury electric vehicle maker was expected to raise at least $1.5 billion to accelerate production of its new Model 3, but strong demand allowed the carmaker to raise more, albeit at a slightly higher yield than expected.

Last year, CEO Elon Musk revealed a list of goals Tesla (NASDAQ:TSLA) hopes to achieve by 2020.

"MB was given 52 weeks of salary & stock in appreciation for her great contribution & left to join a small firm, once again as a generalist", Musk said. That roughly corresponds with when Tesla started to catch on as a baby name. As the company seeks funding through a $1.5 billion bond offering, investors are at odds over whether the risk associated with the investment.

Following the announcement, Standard & Poor's reaffirmed its negative outlook for the automaker and assigned a "B-" rating for the bond issue - deep into junk credit territory.

Making the announcement at an event for shareholders, Musk suggested a lack of battery supply from Tesla Gigafactory could cause a future bottleneck for the Model 3's production. They broke up in acrimonious fashion past year.

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3 must-read Elon Musk quotes from Tesla's earnings call

He said: "Amber and Elon are both very serious about each other". Of course, Tesla will pitch itself as a "green" bond issuer and the final rate of interest could depend on investor appetite. The Model 3 is supposed to drive economies of scale by scaling to far higher volumes, and Tesla has said it's adding 1,800 reservations a day for the vehicle.

For those who were interested in the Model 3 based on its $35,000 price tag, the Model S 75 is the next best bet, though it's still considerably expensive. That is likely what Musk means by "production hell". The WSJ reported recently that Tesla finished its latest quarter with $3 billion in cash, $2 billion of which it plans to spend in the second half of the year.

But short sellers weren't the only ones with a dour opinion of Tesla.

The sale was managed by Goldman Sachs Group, Morgan Stanley, Barclays, Bank of America Corp, Citigroup, Deutsche Bank AG and Royal Bank of Canada.

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