Tesla slides following news the company is offering $1.5 billion of junk bonds
Marcio Jose Sanchez/AP
Shares of Tesla are down 0.39% at $355.53 a piece after the company announced on Monday it will be issue bonds to raise $1.5 billion.
After the announcement, Standard & Poor's gave the bonds a B- rating, putting them in the high-risk junk bond category. Moody's assigned a similar B3 rating to the bonds.
"We could lower our ratings on Tesla if execution issues related to the Model 3 launch later this year or the ongoing expansion of its Models S and X production lead to significant cost overruns," S&P said in a statement.
According to Bank of America Merrill Lynch, the standard interest rate for a bond like Tesla's would be 5.5%, but factors like the lack of a long credit history and the "green" nature of the company could affect the rate.
Tesla is going into "production hell" as it begins to produce its first mass-market vehicle, the Model 3, according to CEO Elon Musk.
Right now, the company is burning through its cash faster than ever, and only has three quarters of runway left if it continues at its current rate, according to hedge fund manager David Einhorn.
Shares of Tesla are up 65.59% this year.
Watch Tesla's share price move in real time...
- US buys 81 Soviet-era combat aircraft from Russia's ally costing on average less than $20,000 each, report says
- 2 states where home prices are falling because there are too many houses and not enough buyers
- A couple accidentally shipped their cat in an Amazon return package. It arrived safely 6 days later, hundreds of miles away.
- ICICI Bank shares climb nearly 5% after Q4 earnings; mcap soars by ₹36,555.4 crore
- Markets rebound sharply on buying in bank stocks firm global trends
- Bengaluru's rental income highest in Q1-2024, Mumbai next: Anarock report
- Rupee falls 10 paise to settle at 83.48 against US dollar
- Include 4 hrs of physical activity, 8 hrs sleep in routine for optimal health, suggests study
- JNK India IPO allotment date
- JioCinema New Plans
- Realme Narzo 70 Launched
- Apple Let Loose event
- Elon Musk Apology
- RIL cash flows
- Charlie Munger
- Feedbank IPO allotment
- Tata IPO allotment
- Most generous retirement plans
- Broadcom lays off
- Cibil Score vs Cibil Report
- Birla and Bajaj in top Richest
- Nestle Sept 2023 report
- India Equity Market