Tesla just saw $920M of cash disappear
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.