Tesla bond hits record low, stock slips as investor worry deepens

[webfact]

Tesla bond hits record low, stock slips as investor worry deepens

By Noel Randewich

 

FILE PHOTO: A Tesla sales and service center is shown in Costa Mesa, California, U.S., June 28, 2018. REUTERS/Mike Blake/File Photo

 

SAN FRANCISCO (Reuters) - Tesla's <TSLA.O> stock and bond prices dropped on Wednesday after Chief Executive Elon Musk renewed an attack on a British caver whom he had previously insulted on social media and a day after Mercedes unveiled a challenge to the electric car maker.

 

The stock dropped 2.8 percent to $280.74, the lowest level since late May, following a 4.2 percent decline on Tuesday after Mercedes introduced its first fully electric car in Stockholm.

 

The $1.8 billion high-yield bond Tesla issued a year ago hit a record low price on Wednesday. It also became more expensive to insure Tesla's bonds against default.

 

Tesla's stock has lost a quarter of its value since Aug. 7, when Musk tweeted that he had secured funding for a previously undisclosed plan to take Tesla private.

 

Musk on Aug. 24 abandoned that plan, but he faces lawsuits and a U.S. Securities and Exchange Commission investigation into the factual accuracy of his tweet that funding for the deal was “secured.” The incident is weighing on investor confidence and has hurt the credibility of Musk, long viewed by Tesla supporters as its most valuable asset.

 

Also raising concerns about Musk's leadership and focus as Tesla struggles to increase production of its Model 3 mass market sedan, BuzzFeed News reported late on Tuesday that Musk, in an email to the news site, called British cave diver Vernon Unsworth a “child rapist.”

 

Musk in July apologized to Unsworth for similar insults he made on Twitter following the rescue of a dozen Thai schoolboys and their football coach from a cave in Thailand. Unsworth, who played a leading role in the rescue, drew Musk's wrath when he said that a mini-submarine created by Musk's rocket company SpaceX to help in the rescue "had absolutely no chance of working."

 

BuzzFeed reported that Unsworth, through his attorney, denied Musk's accusations, and that it found no evidence to substantiate Musk's claim. Tesla did not respond to requests from Reuters for comment. Reuters was unable to verify the emails reported in the BuzzFeed article.

 

“Elon Musk’s ongoing campaign of publishing vile and false accusations against Mr. Unsworth is outrageous," Unsworth's lawyer, L. Lin Wood, said in an email to Reuters.

 

"Musk has publicly and clearly stated that he ‘hopes’ to be sued. Let me be equally clear in response - Musk will be sued - not because of his hopes, but because he deserves to be sued,” Wood said.

 

Previous attacks by Musk against Unsworth on Twitter, and his surprise announcement about taking Tesla private, have led to concerns about Musk's judgment and the ability of Tesla's board to influence his behavior.

 

"He should not tweet about things outside of car production and the auto industry," said Tigress Financial Partners analyst Ivan Feinseth, who has a "neutral" rating on Tesla. "The board, even though it is friendly to him, has now been put in a position where the internal governance of the company has been questioned."

 

Money-losing Tesla has been burning through cash as it has aggressively ramped up production of the Model 3, a process Musk has called "production hell." Tesla bulls are counting on Musk to exponentially raise production, leading to long-term profits.

 

But the company has repeatedly missed production targets.

 

Marking the start of a German onslaught against the U.S. car maker, Mercedes on Tuesday showcased a SUV with a 450-kilometer (280-mile) range that it hopes will appeal to luxury customers and tech-savvy millennials alike. That range compares with the 295-mile range of Tesla's Model X SUV.

 

Falling prices for Tesla's bonds on Wednesday showed deepening concerns about the company's dwindling cash pile. Its $1.8 billion junk bond maturing in August 2025 <88160RAE1=> dropped more than a point in price to a record low 85.75 cents on the dollar.

 

Tesla is rated “B-minus“ by Standard & Poor’s and “B3” by Moody’s Investors Service, six notches into junk bond territory and just one notch above the “C” area typically assigned to distressed issuers. The outlook from both agencies is negative.

 

The cost to insure Tesla debt against default has been rising, and its five-year credit default swaps <TSLA5YUSAX=MP> hit a one-month high, according to Markit. Combined with an upfront payment of 17.2 percent of the bond’s insured value, it would cost an investor around $230,000 to insure $1 million of Tesla debt for a year, up from less than $200,000 two weeks ago, when Musk was still exploring a possible purchase of the company.

 

(Reporting by Noel Randewich; additional reporting by Nivedita Bhattacharjee in Bangalore; Editing by Leslie Adler)

 

-- © Copyright Reuters 2018-09-06

[Burma Bill]

Yippee!!! Thumbs up to Mercedes.

[mdmayes]

Competition is good fro Joe consumer. 

[pegman]

My money would be on Mercedes and other big auto companies over Tesla. It is hard to understand how this company čan have near the same market cap as GM. These big guys build millions of autos a year at à profit to pay for research. Tesla builds 10's of thousands and loses money every year so needs to borrow on the bond market. Musk is also being sued by a short seller about his twittes saying he was taking the company private. Those could cost him big cash compared to the cave guys suit.

[stevenl]

The company has been making big losses from the beginning, the only reason there is still some hope is based on the person of Musk. A very small basis to invest your money in.

[grobec]

I was recently in Hong Kong for a few days. I looked like a Tesla showroom. All models end especially “3” are very popular in HK and China.
Would not be surprised to see a Chinese investment on the horizon. Might have to change the name to TesRa.


Sent from my iPhone using Thaivisa Connect

[sanemax]

4 hours ago, grobec said:

I was recently in Hong Kong for a few days. I looked like a Tesla showroom. All models end especially “3” are very popular in HK and China.
Would not be surprised to see a Chinese investment on the horizon. Might have to change the name to TesRa.

The Chinese are more likely to build their own electric cars

[55Jay]

55 minutes ago, spidermike007 said:

 

They share alot in common? They are both megalomaniacal billionaires, that happen to be insane, unhinged, unstable, and barking up the wrong tree. Only Musk is far, far smarter. I give Trump a D plus. I give Musk a C plus. Except for the rantings. 

There is a correlation with their behavior, no doubt.  To be honest though, does seem like you've gone a bit mental with the tRump obsession lately. 

[metisdead]

Off topic trolling posts have been removed as well as the replies.  This topic is not about Trump. 

[Bluespunk]

On 9/6/2018 at 6:20 AM, webfact said:

The stock dropped 2.8 percent to $280.74, the lowest level since late May, following a 4.2 percent decline on Tuesday after Mercedes introduced its first fully electric car in Stockholm.

 

The $1.8 billion high-yield bond Tesla issued a year ago hit a record low price on Wednesday. It also became more expensive to insure Tesla's bonds against default.

 

Tesla's stock has lost a quarter of its value since Aug. 7, when Musk tweeted that he had secured funding for a previously undisclosed plan to take Tesla private.

 

Musk on Aug. 24 abandoned that plan, but he faces lawsuits and a U.S. Securities and Exchange Commission investigation into the factual accuracy of his tweet that funding for the deal was “secured.” The incident is weighing on investor confidence and has hurt the credibility of Musk, long viewed by Tesla supporters as its most valuable asset.

Bye bye Elon...

[55Jay]

I had TSLA shares and rode it up and down a number of times without caring too much; I was all in on what he was doing, or trying to do, long term, etc.

 

Had to take the blinders off after the "go private" Tweet.  That was a bit too much.  ?

[sanemax]

I did read a report that the Tesla stocks are the most shorted stocks in history .

Which means people have bet that the stock price will fall and they will make huge amounts of money when Tesla stocks fall .

   Who are people people who bet on Tesla stocks falling ?

Could Elon deliberately be trying to make the stock price fall ?

Any payout to Vern could be dwarfed by the potential profit (of the stocks falling)

[janclaes47]

Just now, sanemax said:

I did read a report that the Tesla stocks are the most shorted stocks in history .

Which means people have bet that the stock price will fall and they will make huge amounts of money when Tesla stocks fall .

   Who are people people who bet on Tesla stocks falling ?

Could Elon deliberately be trying to make the stock price fall ?

Any payout to Vern could be dwarfed by the potential profit (of the stocks falling)

Vernon doesn't sue Tesla. he sues Musk, so the stock price doesn't matter as he will go after musk's personal money.

 

Musk also don't want the price decline, because his payout and bonuses are coupled to the stock price.

 

Musk is simply an idiot

[sanemax]

7 minutes ago, janclaes47 said:

Vernon doesn't sue Tesla. he sues Musk, so the stock price doesn't matter as he will go after musk's personal money.

Musk also don't want the price decline, because his payout and bonuses are coupled to the stock price.

Musk is simply an idiot

What I meant was that Musk may deliberately be trying to make the Tesla stock price drop .

His pay and bonuses will be minuscule , to the profits he could make from shorting Tesla shares and a buyout of the company

[janclaes47]

3 minutes ago, sanemax said:

What I meant was that Musk may deliberately be trying to make the Tesla stock price drop .

His pay and bonuses will be minuscule , to the profits he could make from shorting Tesla shares and a buyout of the company

Minuscule bonuses? On top off that Musk owns almost 50% of the shares in Tesla, so I doubt he want to dilute the value of his own shares

 

https://www.theguardian.com/technology/2018/mar/21/elon-musk-tesla-bonus-pay

Elon Musk wins approval for 'staggering' pay deal with potential $55bn bonus

[mfd101]

Something smelly about this particular musk.

 

2 or 3 decades ago it would have been called 'having a nervous breakdown'. These days it's called 'taking stress leave'.

[sanemax]

10 minutes ago, janclaes47 said:

Minuscule bonuses? On top off that Musk owns almost 50% of the shares in Tesla, so I doubt he want to dilute the value of his own shares

 

https://www.theguardian.com/technology/2018/mar/21/elon-musk-tesla-bonus-pay

Elon Musk wins approval for 'staggering' pay deal with potential $55bn bonus

He will only receive $55BN IF he turns Telsa into a $650 BN company within the next ten years , Tesla is now valued at $55 BN , if he doesnt achieve that , he will get nothing , not even a salary .

[Jim1000]

Don't know how Musk copes with just the car company , let alone the space ventures , huge debts ,   court cases , sleepless months , night tweets ,  more court cases   makes my head spin   just thinking about it .

 

Fortunately  , in Pattaya, there is a bar on every corner , think I fancy a beer !

 

[bristolboy]

5 hours ago, sanemax said:

I did read a report that the Tesla stocks are the most shorted stocks in history .

Which means people have bet that the stock price will fall and they will make huge amounts of money when Tesla stocks fall .

   Who are people people who bet on Tesla stocks falling ?

Could Elon deliberately be trying to make the stock price fall ?

Any payout to Vern could be dwarfed by the potential profit (of the stocks falling)

It could be but if so, Musk would be committing a crime.

[janclaes47]

Tesla get hammered today. Executives leaving as well. He get what he deserves

 

[Basil B]

9 hours ago, mfd101 said:

Something smelly about this particular musk.

 

2 or 3 decades ago it would have been called 'having a nervous breakdown'. These days it's called 'taking stress leave'.

Maybe something to do with the dope smoking weed...

Quote

Elon Musk smokes marijuana live on web show

https://www.bbc.co.uk/news/technology-45445554

 

Would you invest in a company lead by someone out of there mind on Jamaica Woodbine's??? 

[metisdead]

Tesla didn't do well on Friday:

 

Tesla stock closes down 6% after top executives resign and Elon Musk smokes weed on video

• Shares of Tesla plunge after news of a pair of C-suite executive resignations and a bizarre video showing CEO Elon Musk smoking pot on a podcast.
• It extends a painful week for the automaker. As of Friday's close, the stock lost more than 11 percent on the week.
• Friday's plunge puts Tesla stock more than 30 percent off its all-time intraday high of $389.61.

Read more here:  

https://www.cnbc.com/2018/09/07/tesla-sinks-8percent-after-bizarre-musk-podcast-appearance-cao-exit.html

[Jim1000]

If I was a Tesla shareholder I would hope you were making all this up  !

[khundon]

On 9/7/2018 at 6:01 AM, sanemax said:

The Chinese are more likely to build their own electric cars

There are at least 9 Chinese companies doing just that. ?

[bendejo]

Now that marijuana is legal in some places, with more adding to the number each day, the old alarms about the dangers of illegal drugs, drug-crazed behavior, narcotics addiction etc are fading away as well.

Kramer, a stock-picking TV pundit (a personal rule of stock trading: NEVER take Cramer's advice, but consider doing just the opposite (same for his pals 'the ponytail boys')) went off on this "OMG!  He's smoking pot!  there goes the company!"

For those who are strangers to it, is just like booze in that it wears off or you sleep it off, maybe a little bit of a hangover, and you hope you didn't do anything too stupid the night before.  But no, you will not be pawning your granny's wedding ring because you crave MORE!!

 

Wait, what was that?  The president of General Motors was seen in a restaurant last night, where he had a few glasses of wine?  THE COMPANY IS BEING RUN BY AN ALCOHOLIC!  SELL NOW!!

 

Otherwise, this whole celebrity businessman thing is pretty  boring stuff IMO, and I have no concern about what EM does.  I would like to see the Thai expat he slandered sue his ass and win, though.  I think he toked during the interview because the host offered it, and EM didn't want to 'wimp out.'