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Offbeat Goldman Sachs: Tesla is going to need to raise $10 billion in 2 years to keep going

17:21  17 may  2018
17:21  17 may  2018 Source:   cnbc.com

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Goldman Sachs says electric car company Tesla may require as much as $ 10 billion in additional capital by 2020 to fund the company's operations. "This level of capital transactions may be funded through multiple avenues, including new bond issuance, convertible notes, and equity

Electric car company Tesla may require as much as $ 10 billion in additional capital by 2020 to fund the company's operations, according to The persistent cash burn has kept analysts like Tamberrino unconvinced that the Palo Alto, California-based company can keep going at this pace without a

a car parked on the side of a road© Provided by CNBC Electric car company Tesla may require as much as $10 billion in additional capital by 2020 to fund the company's operations, according to Goldman Sachs.

"We believe this level of capital transactions may be funded through multiple avenues, including new bond issuance, convertible notes, and equity," analyst David Tamberrino wrote in a note to clients Thursday. "We see several options available to the company to refinance maturing debt and raise incremental funds, which should allow Tesla to fund its growth targets."

While Tamberrino was confident chief executive Elon Musk won't have trouble acquiring the extra cash, the infusion will likely present its own costs. Issuing additional debt could weigh on the company's credit profile, while supplying more stock or convertible bonds would dilute current shareholders.

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Electric car company Tesla may require as much as $ 10 billion in additional capital by 2020. The persistent cash burn has kept analysts like Tamberrino unconvinced that the Palo Alto, California-based company can keep going at this pace without a larger financial cushion while short sellers keep the

Tesla Inc. will need about $ 10 .5 billion in fresh capital through 2020 to keep operating and meet its own targets, Goldman Sachs analysts said Thursday. That’s the sum needed from external capital raises and debt refinancing for the electric-car maker to fund its current operations and finance new

Tesladid not immediately respond to CNBC's request for comment.

Despite the forecast for additional capital requirements and a sell rating from Goldman, Musk insisted he has no intention of raising new money as recently as May 2.

Asked earlier this month if he's mulling a capital raise, Musk simply said "no."

"I specifically don't want to," he said on a conference call after Tesla posted first-quarter earnings that beat expectations.

Tesla finished the quarter with roughly $2.7 billion in the bank, down from a balance of $3.4 billion at the end of 2017. The persistent cash burn has kept analysts like Tamberrino unconvinced that the Palo Alto, California-based company can keep going at this pace without a larger financial cushion while short sellers keep the heat on the company' equity.

Tesla shares are down 8 percent this year and closed Wednesday at $286.48, giving the automaker a market value of $48.6 billion.

Tamberrino believes the stock price will fall to $195 over the next six months, a 31 percent decline.

Goldman Sachs made a staggering $200 million in one day as markets plunged .
Boom times have returned on Wall Street, at least for one trading desk. Goldman Sachs made $200 million in profit on a single day this February as calm in stock markets was shattered with a historic surge in volatility, according to people with knowledge of the move. That's on par with what the firm's derivatives unit typically makes in an entire year, said the people.

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