Tesla is at risk of bankruptcy if the stock falls by 20%

Tesla CEO Elon Musk, who borrowed $517 million on margin to buy more stock, potentially would be forced to liquidate all his shares and risk bankrupting Tesla if the price falls by 20 percent. Tesla, Inc. has lost money almost every quarter over the last 16 years. Yet, the company has been able to regularly raise large amounts of cash from investors, because Wall Street has argued that Tesla is a Silicon Valley technology stock, instead of a Midwest car company. Despite the company reporting lower car sales, a bigger financial loss and risks that its Autopilot self-driving feature may have caused a March 1 car crash that decapitated the driver, Tesla sold $750 million of stock at a price of $243 a share to the public on May 1 in an underwritten transaction led by Goldman Sachs and others. The Securities & Exchange Commission disclosure documents reveal that Elon Musk bought $10 million of stock in the last offering to help fund the company. That means that Musk now...(Read Full Post)
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