Currently Tesla stock is trading a bit over $300.
For Tesla, $920 million in convertible senior notes are set to expire on Friday at a conversion price of $359.87 per share.
Tesla's critics have suggested that the company is avoiding raising money from Wall Street because doing so would trigger legal disclosure requirements that could force Tesla to reveal embarrassing information to shareholders. Between the payment slowdown and the line of credit, Tesla avoided burning about $740 million in cash during the second quarter. Source: Tesla Q3 2019 Update Letter. In the last 5 years, Tesla’s quarterly cash position has grown from $1.5 billion in Q1 2015 to nearly $9 billion in Q2 2020. Asked about this, a Tesla spokesperson told Ars that the company has "asked fewer than 10 suppliers for a reduction in total capex project spending for long-term projects that began in 2016 but are still not complete." Get this delivered to your inbox, and more info about our products and services.
Tesla cash on hand for 2019 was $6.514B , a 67.93% increase from 2018. Tesla cash on hand for the quarter ending June 30, 2020 was $8.615B, a 69.49% increase year-over-year.
The company also warns investors that, "if we are unsuccessful in our efforts to control and reduce supplier costs, our operating results will suffer.".
Conversely, if investors lose faith in Tesla, that could threaten Tesla's ability to raise more capital, posing an existential threat to the company. The company has several cash-intensive projects under way or pending, including construction of a new factory in Germany and a long-planned expansion of its Gigafactory battery plant in Nevada. Referring to the chart again, whenever cash came into the company in any quarter, it will be shown as positive figures in the chart and this will result in a higher cash position. On Monday, the SEC asked a federal court to hold Musk in contempt for violating an agreement the parties struck last year over Musk's Twitter use. Not only are investors interested in the cash position of Tesla, but creditors as well are also concerned about Tesla liquidity. However, the company’s free cash flow generated was only about $600 million in 2Q 2019, meaning that cash reserves should only come to about $2.9 billion when you add up both free cash flow in 2Q 2019 ($600 million) and cash reserves from the prior quarter ($2.3 billion).
Then this week, The Wall Street Journal reported that Tesla was pressuring suppliers for more favorable financial terms—including, in at least one case, partial retroactive refunds of past payments. While Tesla's loss exceeded Wall Street's expectations, investors were mostly impressed by the electric carmaker's headline numbers, including its cash burn: Tesla's net cash outflow was just $130 million in the quarter. The growth in cash reserves is attributed to the expanding working capital requirement when the company is actively growing its business. It's possible -- maybe even likely -- that Tesla is trying to build a cash infusion into its go-private deal.