Tesla Inc. is a sell before the company's catastrophic cash burn wipes out TSLA's stock price
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TSLA: Fear Is Spreading
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Moody’s Corporation, a credit rating agency, cut its Tesla debt rating further into junk territory.*
It isn’t just Moody’s, either; the creditors are getting antsy.
Tesla issued 5.3%-yielding bonds just last year.
Already, those 100 par bonds have plummeted to 87 cents on the dollar
(a decline that has accelerated over the past month).
That results in Tesla’s bonds, sold to the public at 5.3%, now yielding 7.5%.
That’s a substantial and worrisome decline in Tesla’s creditworthiness within the space of a year.
Additionally, the credit default swap “CDS” market is showing concern about Tesla.
The price to buy CDS protection against a potential Tesla default has surged in recent weeks.
The five-year CDS for Tesla in particular is now up to implying a ~40% chance of default
over the next five years.
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Elon Musk Isn’t the Donald Trump of Cars
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TSLA Stock: Get Out While You Can
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investorplace.com/2018/05/...nvestorPlace+%28InvestorPlace%29
(by Ian Bezek; May 8, 2018, 2:31 pm EDT)
* = from B3 to Caa1