According to recent reports today from Tesla, the company is back at square one after the U-turn the company made few days ago. Elon Musk who is the current Tesla CEO on Sunday stated that he will not purchase the shares as he had previously said but he said he is dropping the pursuit of taking the company private. From this, the company seems to be on a looming debt which needs to be cleared by the end of this year. That is by the end of the last quarter.
Nevertheless, after the Elon Musk’s private plans evaporated, Wall Street said that they are expecting the luxury electric car company to raise the money as soon as possible to avoid huge debts which the company would suffer at long run. According to Wall Street, Tesla at the moment have a debt load of about $10.5 billion and most likely at the moment, the company is undergoing short of an impending cash.
Tesla Chief Executive Elon Musk said previously on Friday that he would pressure the shareholder concerns with this large debts and that he will no longer pursue taking the private deal, he also added that abandoning this idea would stop stunned investors and also may help in drawing regulatory scrutiny. Musk nevertheless stated that the abandoning of the private deal has no connection to the looming debts that the company is suffering from at the moment. However, Tesla had one quarter of free cash flow which was so positive but since the last quarter of 2013, the company has had a $1.3 billion debt which is incoming and should be due in the next one year.
However, according to the cash burn which Tesla has suffered, it means that this luxurious electric car company needs to raise it’s income by $2 billion before the end of 2018. This is to ensure that the company stay afloat in terms of cash and marketing. In addition to this, one of the companies representatives requested the CEO to comment on the rumors that the company is planning to pay its convertible car debts with the internally generated cash flow within the company.