Now that they want out, it indicates that debt investors would rather have cash in hand than exposure to Tesla Motors’ stock, a bearish sign for the company. The revelation comes as part of the electric auto maker’s planned SolarCity merger, which is now reportedly valued at $2.6 billion. So there are a lot of Musk family dollars funding SolarCity. Things got worse when Mark Zuckerberg discovered his $95 million satellite was sitting on top of the rocket, and took to Facebook to express his “deep disappointment”.
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On Wednesday, the Wall Street Journal reported that Musk is now dealing with a cash issues at both Tesla and SolarCity.
“Long term, the SolarCity acquisition might make sense operationally”, said Levy. That probably means more stock sales, which will dilute existing holdings, said Salim Morsy, a Bloomberg New Energy Finance analyst.
Ross Gerber, chief executive officer of Gerber Kawasaki Wealth & Investment Management, for one is souring on Tesla’s fortunes even as his company holds a $5 million position in Tesla and has recently been selling shares.
After publishing its second quarter 2016 financial results last month, Tesla said that it plans to deliver about 50,000 vehicles during the second half the year to bring the total to 80,000 vehicles. Tesla on August 1 offered $25.37 a share, based on the average price for Tesla stock in the five days to July 29.
The February discussion between Musk and Rive was described as “high-level, conceptual”, with the two talking about possible product offerings. Critics have chided the Musk and Tesla officials for not shutting down the function in light of the fatal crash in May, but Musk steadfastly maintained that the system was not being used properly and that the company would continue with its development program.
Musk has a famously high tolerance for risk.
The explosion – heard and felt for miles around – dealt a severe blow to SpaceX, still scrambling to catch up with satellite deliveries following a launch accident a year ago.
The Falcon 9 has several successful missions for this year alone, but this event could have set back the company despite its track record.
Shares of Tesla closed at $197.78 Friday, down 1.5%, while SolarCity shares closed at $18.48, down 1.6%.
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Elon Musk’s vast clean energy kingdom has been built on incredible innovation – and huge amounts of debt. At these levels, it would be Tesla’s biggest drop since June, and SolarCity’s largest decline since May. Tesla is just spending too much money.
