TLDR Cash burn, expected to top $2 billion this year, against $3b in cash means Tesla are raising $1.5b in junk bonds to help cash flow as they ramp up production and scale.
It always seemed strange to me that banks/bonds/lending seems to have such a small role in financing risky ventures. Is it just that capital is a better deal? How does risk work here, are bondholders effectively de-risked compared to stockholders?
It seems unlikely with someone like Musk at the helm that the company would be wound up before assets (and loans guaranteed on them) didn't pay the salaries. Hence, in the case of liquidation, I can't see bondholders getting any more than shareholders - ie. NILL.
Am I mistaken?