Car maker in liquidity shortage: Tesla shares on the decline? The real problem is the bonds!

09/11/2018

Car maker in liquidity shortfall Tesla shares on the decline? The real problem is the bonds!

youtube / cnn

Lost perspective? With antics such as smoking a joint in front of the camera, Tesla-Chef-Musk increasingly distracts investors.

Under the impression of bad news and strange activities of company boss Elon Musk is the share of the electric car builder Tesla Show stock market chart in the past weeks rushed by up to 30 percent into the basement – accompanied by attentive media coverage. What remained almost unnoticed: The probably much more worrying drop in price took place on bond marketTesla’s bonds recently fell to record lows in just a few weeks.

For example, a $ 1.8 billion bond issued by Tesla last year, due in 2025, was trading well above 90 cents in early August. By the end of last week, the price went down to temporarily less than 84 cents.

Those responsible at Tesla are likely to follow this trend with concern, for a number of reasons. On the one hand – as well as on the stock market – it shows how much confidence investors have in the company and its ability to generate profits in the future, especially with the new model, the promising Model 3, is dwindling.

One reason for the skepticism of investors are always new escapades of CEO Musk, be it that this in the dispute with a Thai cave diver bad insults Trumps in the world, whether it be in an interview with the “New York Times” complains of stress and from Sleep Aid reportedor is it that he publicly pulls on a joint in a podcast in the US, as happened a few days ago.

In addition, there are “real” news from Tesla, which are also hardly suitable to reassure investors. These include, for example, the Departures of several top executives in recent weeks, including of all the chief accountant of the group, as well as the first announced departure Teslas from the stock exchange, which was later blown off again,

All this together has already scared the investors in the stock market. The fact that the players in the bond market are now at a distance to Tesla, but for the company seems even fatal. After all, bond investors are generally considered “smarter” than the majority of stock buyers. They do not necessarily respond to every tweet a company boss sends around the world. However, if they decide to sell a paper, their opinion has changed fundamentally.

Page 1 of 2

To home page