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Didn't Tesla repay this loan back with another loan: http://www.reuters.com/article/2013/05/15/us-tesla-stock-idUSBRE94E18W20130515 http://www.reuters.com/arti

Didn't Tesla repay this loan back with another loan: http://www.reuters.com/article/2013/05/15/us-tesla-stock-idUSBRE94E18W20130515 http://www.reuters.com/article/2013/05/15/us-tesla-stock-idU... I'm not a market economics kind of guy but I don't see how this is any kind of special achievement. Surely any other car manufacturer could have done precisely this?

apaprocki 13y ago
Not if the rate was 10%, 20%, etc. It's just a form of bootstrapping. The government stepped in and bootstrapped it so now the private sector can finance it normally.
cinquemb 13y ago
Maybe it isn't a special achievement if you're suggesting GM could pull this off.
twistedpair 13y ago
Seems that not all electric car companies getting loans from the US gov't are repaying their loans.
meterplech 13y ago
The story is that they paid it back via the private market, meaning that the financial community believes in the company enough that they no longer need public support. Incidentally, they did issue corporate debt (a form of a loan, sure), but also issued more equity as well.
- mrkmcknz 13y ago
  I guess it probably made sense financially in that the private market believed in Tesla enough to provide a better rate than the original loan.
ChuckMcM 13y ago
No, they paid back the government loan with stock. The difference between a 'convertible note' and a 'loan' is that in a convertible note turns into its conversion when 'due.' Basically it turns into stock at the value of the amount borrowed plus interest. There is a fascinating Convertible Note generator that you can run on the Wilson Sonsini web site [1] which I recommend doing if you are at all interested and read all the text about why or why not you might want choose one set of terms over the other. [1] http://www.wsgr.com/WSGR/Display.aspx?SectionName=practice/termsheet-convertible.htm http://www.wsgr.com/WSGR/Display.aspx?SectionName=practice/t...
damoncali 13y ago
It's raising money. For most car companies that is not a special achievement. For Tesla, who has not yet proven that they can make money, it's something of a milestone - at least a smallish signal of market confidence. All the chest beating is just Musk being Musk.

apaprocki 13y ago

Not if the rate was 10%, 20%, etc. It's just a form of bootstrapping. The government stepped in and bootstrapped it so now the private sector can finance it normally.

cinquemb 13y ago

Maybe it isn't a special achievement if you're suggesting GM could pull this off.

twistedpair 13y ago

Seems that not all electric car companies getting loans from the US gov't are repaying their loans.

meterplech 13y ago

The story is that they paid it back via the private market, meaning that the financial community believes in the company enough that they no longer need public support. Incidentally, they did issue corporate debt (a form of a loan, sure), but also issued more equity as well.

mrkmcknz 13y ago
I guess it probably made sense financially in that the private market believed in Tesla enough to provide a better rate than the original loan.

ChuckMcM 13y ago

No, they paid back the government loan with stock. The difference between a 'convertible note' and a 'loan' is that in a convertible note turns into its conversion when 'due.' Basically it turns into stock at the value of the amount borrowed plus interest. There is a fascinating Convertible Note generator that you can run on the Wilson Sonsini web site [1] which I recommend doing if you are at all interested and read all the text about why or why not you might want choose one set of terms over the other. [1] http://www.wsgr.com/WSGR/Display.aspx?SectionName=practice/termsheet-convertible.htm http://www.wsgr.com/WSGR/Display.aspx?SectionName=practice/t...

damoncali 13y ago

It's raising money. For most car companies that is not a special achievement. For Tesla, who has not yet proven that they can make money, it's something of a milestone - at least a smallish signal of market confidence. All the chest beating is just Musk being Musk.