4 ms·
This is not a surprise; there's an old saw that I think I first read in a Buffet annual report. It says that financing tends to alternate forms for companies in
by vessenes 10y ago
This is not a surprise; there's an old saw that I think I first read in a Buffet annual report. It says that financing tends to alternate forms for companies in terms of what makes sense: debt -> equity -> debt -> equity.
Equity offering seems likely to be much cheaper than debt right now; Tesla has great mindshare among consumers, and lots of doubters on the professional investor side.
- verganileonardo 10y agoThat happens because the company is trying to adjust the capital structure to maintain a 'constant' leverage ratio. Too much leverage? Sell shares! Not enough leverage? Sell debt!
- mdorazio 10y agoAlso, Tesla's valuation is still sky-high in comparison to comparable companies (automotive or tech), so converting some of their shares into cash now makes a lot of sense.