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Can you explain how that works? I thought that once a company's stock was listed, third parties just trade it amongst themselves. How does that activity affect
by beaner 8y ago
Can you explain how that works? I thought that once a company's stock was listed, third parties just trade it amongst themselves. How does that activity affect Tesla in terms of how they're able to execute?
- romed 8y agoPublic companies can raise money through "secondary" offerings of stock. That's why an IPO is called an "initial" offering.
- whatok 8y agoTesla has various options for raising cash including selling stock or bonds. In the case of stock, a secondary offering would come at a price relative to the current stock price. In the case of bonds, bonds are in almost all cases higher in the capital structure than equity. Having a large "equity cushion" makes bonds more attractive because there is someone else that will take losses before the bondholders.
- aslkdjaslkdj1 8y agoThere's a clause in Tesla's debt that if the share price is >$360, they can pay their bond notes with stock shares. If it is <$360, they have to pay their debt payments in cash. This obviously has a massive impact on Tesla's already precarious cash position.