Mar 1, 2019

Tesla just saw $920M of cash disappear

Dion Rabouin, Felix Salmon
Data: FactSet; Chart: Naema Ahmed/Axios

Tesla's convertible bond payment is due today, and the bonds won't convert to equity. Shareholders won't be crying.

Why it matters: If Tesla was going to issue dilutive new equity, it would want to do so in a way that actually brings in cash for the company.

By the numbers:

  • Tesla's $920 million in convertible senior notes expire at a conversion price of $359.87 per share.
  • Tesla shares are well below the conversion price, so the company will have to pay that debt in cash.

Details: The company had $3.7 billion in cash on its books at the end of last year, WSJ notes, including existing deposits. Tesla also had more than $5 billion in accounts payable and accrued liabilities along with nearly $10 billion in long-term debt, not including today's convertible bond payment.

Between the lines: When Tesla's 2019 bond was trading over par in late 2014, the stock wasn't anywhere near the $360 conversion price.

Go deeper: Tesla launches $35,000 Model 3 while moving to online-only ordering

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