"There is a well-developed track record of successful investments and generating returns on those investments", said James Albertine, a senior analyst at Consumer Edge Research who has a buy rating on Tesla shares.
Another way to put this record is that you could drive from NY to Detroit in a Tesla on a single charge (actually, a litter farther than that).
After the announcement, credit ratings agency Standard & Poor assigned the issue a "B-" rating. Tesla also was the recipient of unusually large options trading on Thursday.
Tesla Inc. is raising $1.5 billion as it ramps up production of the Model 3 sedan, its first mass-market electric auto. Both ratings are speculative-grade, or "junk". Patience, though, has its rewards, as is the case with the Tesla Model X.
"The major challenge facing the company during the next twelve months will largely be the considerable execution risks associated with the rapid ramp-up in production of a totally new vehicle", Mood's senior vice president Bruce Clark said in a statement. The non-recourse debt was absorbed from the SolarCity acquisition past year, and is largely secured by leased solar systems. In the past the firm has often done hybrid bond and equity deals.
As long as Elon Musk keeps talking about solar roofs and more Gigafactories, cash burn could remain quite high. Tesla reported an increase in Model S/Model X orders since the Model 3 launch, something Elon Musk attributed to clearing the air on the confusion of Model 3 being a third generation product of Tesla, superior to the previously launched models.
Tesla burned through $1 billion in the second quarter preparing for the arrival of the Model 3, which is central to the company's growth strategy and broader goal of popularizing electric cars. Jonas believes that Tesla will deliver only 2000 model 3 cars in 2017 and 90000 in 2018. Tesla ended its second quarter with $3 billion in cash - down from $4 billion in the first quarter.
While it's a lot of money, it could more than double the company's revenue to over $20 billion per year, according to their projections.
Tesla will raise the money by selling bonds to professional investors, despite the company having $3bn in cash. Equities analysts predict that Tesla will post ($6.23) earnings per share for the current fiscal year.