With The Nearly $1 Billion Debt, Bad Furture Is Waiting For Tesla

Tesla, the electric vehicle manufacturer under the leadership of Elon Musk, always seems to face a lot of challenges in the way of its development. The year 2018 has gone by and left the company and its CEO a big mess.

This can be clearly shown via the figures at the end of last year. One of the most convincing proofs is that its production increased significantly in 2018; however, after only a few weeks, Tesla stated that up to 7 percent of its total employees would lose their jobs.

According to CNBC, the major financial fluctuations the company has faced at this time supposedly derive from a debt worth one nearly billion dollars. This must be an unhappy start for Tesla when the year 2019 has just begun. Along with this, both Tesla and the whole electric vehicle industry must be severely affected.

Where is the starting point of the huge debt? It originates from a “convertible senior note”, one of the financial instruments. In other words, if Tesla is trading its stock for over $359.87 (equivalent to Rs 25,635.16) on the first day of March, the debt will turn into shares of the company. However, if everything is different to what is expected, Elon Musk’s company must bear the debt of $920 million in cash.

Although Tesla still has more than one month to go, the situation is not apparently really positive. Reasons are due to its stocks not being beyond the desired value for a few weeks. The news comes from some reports on the network.

Once again, the American automotive company has tried to swim upstream as it used to. It doesn’t only lay off a part of its employees, but it also stopped the referral program for its long-standing customers last week.

CNBC also uncovered that if the nearly billion-dollar debt becomes real, about a third of Tesla’s cash reserves will no longer belong to the existing owner. This is clearly a piece of bad news for a pioneer EV company which has now been upset about boring business norms.