Tesla shares tank; here’s one more reason why(blogs.marketwatch.com)
blogs.marketwatch.com
Tesla shares tank; here’s one more reason why
http://blogs.marketwatch.com/thetell/2012/09/25/tesla-motors-puts-off-u-s-loan-payment/
3 comments
Renegotiating terms of loan!=defaulting
I flagged this submission for its incorrect and misleading title, but Tesla does basically say they will default if terms are not renegotiated and/or their follow on stock sale doesn't raise enough money.
FTA:
Based on our current financial forecast, we currently anticipate that if we do not raise the proceeds from this (stock) offering and do not otherwise adjust our operations accordingly to amend the DOE Loan Facility, we may not be compliant with the current ratio covenant for the quarter period ending March 31, 2013
FTA:
Based on our current financial forecast, we currently anticipate that if we do not raise the proceeds from this (stock) offering and do not otherwise adjust our operations accordingly to amend the DOE Loan Facility, we may not be compliant with the current ratio covenant for the quarter period ending March 31, 2013
Here is the problem with Tesla, SpaceX and other Musk's companies - they depend on government loans, tax incentives and subsidies. They need them to exist, and without them none of the companies would have a slightest chance of success. As soon as the subsidies, tax incentives or loans stop - so does Musk's empire.
Here is the problem with GM, Chrysler and other companies. They depend on government loans, tax incentives and subsidies. They need them to exist, and without them none of the companies would have a slightest chance of success.
Besides the direct bail-out Obama gave GM & Chrysler when they were about to go under, the conventional car companies depend on a huge government subsidy called externalities. Cars depend on a vast road system whose cost is mostly paid for via income and property taxes. Conventional cars also impose huge external costs via pollution and car insurance.
If the implicit subsidies to oil-burners were to stop at the same time as the subsidies to Tesla, Tesla would be partying in the streets.
Besides the direct bail-out Obama gave GM & Chrysler when they were about to go under, the conventional car companies depend on a huge government subsidy called externalities. Cars depend on a vast road system whose cost is mostly paid for via income and property taxes. Conventional cars also impose huge external costs via pollution and car insurance.
If the implicit subsidies to oil-burners were to stop at the same time as the subsidies to Tesla, Tesla would be partying in the streets.
Just because it seems that everyone can now get government subsidies it does not make it right.
It's like saying - Eat sh*t. Billions of flies can't be wrong.
It's like saying - Eat sh*t. Billions of flies can't be wrong.
Either cut everybody off or cut nobody off. Philosophically I'd rather the former, but practically I prefer the latter. The riots we'd get with $20/gallon gasoline are pretty off-putting.
Or maybe $20/gallon gasoline would make solar make more sense? Maybe then we would need to find a way to make more efficient cars?
Subsidies don't help anyone - except people getting them.
Subsidies don't help anyone - except people getting them.
Don't other (recently started) companies depend on government loans, tax incentives and subsidies?
I think it's a good thing that these incentives exists so that (potentially) disruptive companies can be started.
I think it's a good thing that these incentives exists so that (potentially) disruptive companies can be started.
I never said that it is bad that these incentive exist. Personally I own some Tesla stock. I just believe that business that so heavily depends on these incentive will have trouble succeeding. (unless its a part of the military industrial complex)
It's a way of doing business, not necessarily bad (or good)
But I assume private customers will make up for the expenses when the loans end.
But I assume private customers will make up for the expenses when the loans end.
Look at the chart and it's clear that Tesla's stock price has not 'tanked'; it's trading well within the range it's been in for some time. They are not "defaulting" on their loan, they are re-negotiating it.