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They don't need billions of dollars to survive, they need billions of dollars to expand
by dayaz36 9y ago
They don't need billions of dollars to survive, they need billions of dollars to expand
- mhermher 9y agoSo you haven't read it then. It is indeed to survive, as in in order not to run out of cash. Their biggest liabilities being debt payments coming up.
- dayaz36 9y agoAnd why do you think they have a lot of debt?
- Hypx 9y agoThe original plan was to use profits to fuel the expansion. However, there was no profits and they used debt and capital raises instead. Unfortunately, the expansion generated no profits of its own, only huge losses, requiring even more debt to expand further. Eventually, there was a vicious cycle of debt, losses, and more debt need to expand further, leading to the situation you see now.
- mhermher 9y agoBecause they lose money and need to borrow more? But in any case, regardless of why they have it, whether they keep expanding or not: they need to pay back that debt and they won't have the money for it. It's as simple as that. Does that make sense? So no, they can't survive if they stop expanding. The only way to survive is to either be profitable within the year or raise more capital.
- kryptiskt 9y agoA boutique carmaker with 11 billions in long-term debt is dead in the water. They must expand to survive.