While still struggling to churn out the large numbers of Model 3 electric vehicles, Tesla has expended $745.3m in cash and reported a record $709.6m net loss in the first quarter.
Questions have been raised about the ability of the company to be pay its bills by early next year without incurring more debts or selling more stocks because of the loss and cash burn that the company announced recently.
Tesla’s CEO, Elon Musk said that it was “quite likely” that the company would soon generate revenues and register a positive cash flow in the third quarter, while conceding that the criticisms of the company were valid.
“It’s high time we became profitable,” said Musk. He has pledged to make restructuring this month to attain profit goals. “The truth is you’re not a real company until you are, frankly. That’s our focus right now.”
Despite assurances that the production of the Model 3 electric car was on track, there was a fall of 5 per cent in the shares of the company.
Interestingly, there was no change in the stock price after the announcement of the results but saw a drop following the conference call between Musk and analysts where Musk had cut short questions of analysts. The drop resulted in the company losing out $2bn in market capitalization.
“These questions are so dry. They’re killing me,” Musk said when he was asked by an analyst about the percentage of Tesla 3 reservation holders who have started to configure options for their cars. This is a reflection of the amount of profit that Tesla will be able to make from the vehicles. Another analyst was also cut off when he asked about a capital requirement.
Its net loss amounted to $4.19 per share, Tesla said. The company lost $3.35 per share after excluding one-time expenses such as stock-based compensation. There was a 26 per cent increase in revenues year-on-year to touch $3.4bn.
The company was expecting to generate revenues from sales of the Model 3 and therefore it did not need to come back to the market for raising more cash, the company had said in April. But there has bene troubles with the delivery of the car to several hundred thousand customers who had made a pre-payment of $1,000 per order.
Stating that Tesla lacked enough cash to funds its $3.7bn cash needs for normal operations, capital expenses and debt which is due early next year, the stock of the company was downgraded into junk territory by Moody’s Investor Service back in March. A total of $9.5bn in long-term debt was outstanding against the company till the end of last year.
“The negative outlook reflects the likelihood that Tesla will have to undertake a large, near-term capital raise in order to refund maturing obligations and avoid a liquidity shortfall,” Moody’s wrote in a note to investors.
(Source:www.theguardian.com)
Questions have been raised about the ability of the company to be pay its bills by early next year without incurring more debts or selling more stocks because of the loss and cash burn that the company announced recently.
Tesla’s CEO, Elon Musk said that it was “quite likely” that the company would soon generate revenues and register a positive cash flow in the third quarter, while conceding that the criticisms of the company were valid.
“It’s high time we became profitable,” said Musk. He has pledged to make restructuring this month to attain profit goals. “The truth is you’re not a real company until you are, frankly. That’s our focus right now.”
Despite assurances that the production of the Model 3 electric car was on track, there was a fall of 5 per cent in the shares of the company.
Interestingly, there was no change in the stock price after the announcement of the results but saw a drop following the conference call between Musk and analysts where Musk had cut short questions of analysts. The drop resulted in the company losing out $2bn in market capitalization.
“These questions are so dry. They’re killing me,” Musk said when he was asked by an analyst about the percentage of Tesla 3 reservation holders who have started to configure options for their cars. This is a reflection of the amount of profit that Tesla will be able to make from the vehicles. Another analyst was also cut off when he asked about a capital requirement.
Its net loss amounted to $4.19 per share, Tesla said. The company lost $3.35 per share after excluding one-time expenses such as stock-based compensation. There was a 26 per cent increase in revenues year-on-year to touch $3.4bn.
The company was expecting to generate revenues from sales of the Model 3 and therefore it did not need to come back to the market for raising more cash, the company had said in April. But there has bene troubles with the delivery of the car to several hundred thousand customers who had made a pre-payment of $1,000 per order.
Stating that Tesla lacked enough cash to funds its $3.7bn cash needs for normal operations, capital expenses and debt which is due early next year, the stock of the company was downgraded into junk territory by Moody’s Investor Service back in March. A total of $9.5bn in long-term debt was outstanding against the company till the end of last year.
“The negative outlook reflects the likelihood that Tesla will have to undertake a large, near-term capital raise in order to refund maturing obligations and avoid a liquidity shortfall,” Moody’s wrote in a note to investors.
(Source:www.theguardian.com)
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