TESLA’S NIGHTMARE BEFORE CHRISTMAS
It looks like Elon Musk just canceled Thanksgiving and probably Christmas, too — if you work at Tesla Inc., anyway.
The electric-vehicle-cum-battery-cum-solar-equipment company Musk heads reported third-quarter results on Wednesday evening. Tesla missed earnings forecasts by a mile. But that number, never a huge concern, mattered even less this time around. It’s cash and cars — specifically the somewhat more mass-market Model 3 — that count.
First, cash: Having racked up its first quarter of burning through more than $1 billion of cash in the three months ending in June, Tesla topped that with $1.4 billion of negative free cash flow in the third quarter. In the past two quarters, therefore, Tesla has burned through more cash than the previous six combined.
More importantly, it has burned through roughly four out of every five of the $3.2 billion dollars it has raised since late March through selling new equity and convertible debt and its debut in the high-yield bond market.