Tesla, Inc. (NASDAQ:TSLA) could be weeks away from paying out $920 million in cash to bondholders
Tesla could be weeks away from paying out $920 million in cash to bondholders, potentially wiping out much of the company’s war chest, CNBC reports.
With time running out, Tesla hopes to increase its stock price to $359.87 per share by March 1, a threshold that would allow the company to instead pay its bondholders in equity, rather than cash.
The company’s stock hasn’t traded above $359 per share since mid-December, and crashed to as low as $300 per share on Friday, after CEO Elon Musk warned investors that the Palo Alto-based automaker would eke out a “tiny profit” in the coming quarter. The company also said it would lay off more than 3,000 full-time employees, or about 7 percent of its workforce.
At last count, Tesla had about $3 billion in cash and cash equivalents on the books, which means it could be forced to give up a third of its cash to pay back its bondholders.
Back in early February 2014, Tesla was eager to raise up to $2.3 billion in cash to help it finance the construction of the Gigafactory battery plant outside Reno, Nevada. The company broke up the raise into two separate bonds — the first maturing on March 1, 2019, and the other on March 1, 2021.
At the time, Tesla made a big bet, telling bondholders that it would either pay them back in cash, or convert their stakes into stock if the company traded above $359.87 per share, a conversion premium of 42.5 percent at the time.
Tesla’s share price has swung wildly over the past 12 months. The stock peaked in early August, briefly touching $380 per share, after Musk said he had “funding secured” to take the automaker private. A confirmed backer for such a buyout never emerged, and shares crashed as low as $250 per share by October, on fears Musk might be forced to step down as CEO.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
By the way, prices are vulnerable to a correction towards 328.59.
The projected upper bound is: 336.15.
The projected lower bound is: 260.00.
The projected closing price is: 298.08.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white candles.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 15.1928. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 4 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 38.38. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 91 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -119.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 2 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 0 period(s) ago.
Rex Takasugi – TD Profile
TESLA INC closed down -3.340 at 298.920. Volume was 35% above average (neutral) and Bollinger Bands were 6% narrower than normal.
Open High Low Close Volume___
304.820 308.000 295.500 298.920 12,066,741
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 333.95 340.04 315.05
Volatility: 87 74 74
Volume: 7,942,672 7,241,282 9,049,959
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
TESLA INC is currently 5.1% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of TSLA.O at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on TSLA.O and have had this outlook for the last 1 periods.