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Isn't debt harder to raise than equity? My impression is that the risk tolerance for junk bond buyers is somewhere between high grade credit and equity, perhaps
by mathattack 9y ago
Isn't debt harder to raise than equity? My impression is that the risk tolerance for junk bond buyers is somewhere between high grade credit and equity, perhaps closer to equity. Certainly more conservative than growth or venture equity.
I'm the first to admit that I don't follow their specific financials to know how much runway they need to be profitable.
- akvadrako 9y agoNormally, I would say that's the case, but Tesla stock isn't normal. When they sell debt, their stock price goes up. Debt has one big advantage over equity too, which is that if the company goes under, bond holders are repaid if possible. Equity holders only own whatever is leftover.