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Comment by cryptoz | Hacker News Reader

> Tesla, without any doubt, is on the verge of bankruptcy

Haha! "Without any doubt". Okay, sure, Mr. Future Predictor. He gives it 4 months. This is silly doomsday insanity, Apple-will-be-bankrupt-soon kind of hilarity.

Tesla's not going away and certainly will not be bankrupt. This dude thinks that the entire financial world will abandon Tesla completely - but that's just not true. Tesla could raise as much money as necessary for as long as necessary and Elon knows it. This guy doesn't because he's old and curmudgeonly and stunk in his ways without at all understanding what drives people and investments today.

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> This is silly doomsday insanity, Apple will be bankrupt soon kind of hilarity.

Apple is probably not a good comparison here.

Apple was about three months from bankruptcy when Steve Jobs came back, and his pulling it back from the brink is regarded as a once-in-a-lifetime turnaround success. If Tesla's situation is as dire as Apple's was, that is not a good sign.

Note also that before he had time to introduce things like the iMac and iPod, Jobs had to stop the bleeding by brutally slashing unproductive businesses. I don't see Tesla doing anything like that.

I was referring to Modern Apple, post-2016 Apple, not Apple from nearly 30 years ago. I am not referencing that moment in time, I am referencing a very strong company with huge cash reserves and a dedicated wealthy fanbase along with fawning investors, both private and public.

> I don't see Tesla doing anything like that.

Of course not, that would Actually bankrupt the company. What Tesla must do is what they say their plans are: ramp up production and bring new product categories online. They will succeed, and if there are short-term cash issues they will be resolved.

Tesla is a $10T play. Elon wouldn't let it die in 4 months because of some silly, relatively small cash issue getting in the way.

>I was referring to Modern Apple, post-2016 Apple

The difference is Apple prints money. And Foxconn is arguably the best there has ever been when it comes to manufacturing.

Tesla burns money.

The only similarity is their cult leaders.

After moody's downgraded tsla 40 minutes ago, their bonds fallen and yield rose to 7.1%.

Maybe Tesla can rise as much as necessary, but i won't call 7.1% yield to maturity as very favorable.

7.1% is not the coupon rate, it's the yield to maturity.

Right, thanks for correcting me. Will update the post.

No problem! And a 7.1% YTM isn't exactly a vote of confidence either, so your point still stands...

Could you explain what you are talking about?

We are talking about interest rate on Tesla debt. It was 5.5% last august, and now, with downgrades and M3 delays, it is 7%. If Tesla would like to tap capital markets for more cash to borrow, interest rate might get uncomfortably high, because market considers Tesla debt getting more and more risky. At some level, interest rate gets prohibitively high, meaninig that markets do not trust you to pay back in time. Since tesla carries a lot of debt (6B?) which it needs to refinance, such move could be deadly.

Thank you.

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