Tesla, Oh, Tesla, Don't Cry For Me -- August 5, 2015

Updates

August 6, 2015: when I wrote that note about the CFO departing Tesla, I thought I had heard he was leaving, but had forgotten, and didn't waste time looking it up. My memory is not so bad; he did announce he was departing -- just as soon as a replacement is found.  

Tesla's business is so weak that it had to guide 3Q and 4Q down, and all hints from Musk's comments on the conference call point to a capital raise coming extremely soon (within a few days?). Taking the issues one-by-one:

• Deliveries: guidance is down; also, unable to say how many cross-over SUVs they plan to ship next month;
• Loss per car is increasing: from $11K per car in December, 2014; to $16K per car now;
• Financial: looks like Goldman Sachs and/or Morgan Stanley are getting ready to broker equity issue; possibly using idea of becoming a Uber competitor as an excuse; and,
• Cash burn: $550 million in quarterly cash burn, Tesla basically needs to raise $2.3 billion not just in 2014, but every year.

Original Post

 

Well, well, well, isn't this interesting?

For those not paying attention, Tesla is burning through cash so quickly it had to put together a $750 million loan from seven banks just a few weeks ago, and it looks like more of the same.

Reuters is reporting that Tesla may have to raise even more cash.

Shares of Tesla Motors Inc fell about 6 percent on Wednesday after the electric car maker posted a wider quarterly loss and said it may raise more cash to offset heavy spending on expanded production.

Tesla lowered its full-year sales forecast to a range of 50,000 to 55,000 cars. Last year, Musk had forecast sales of 60,000 cars in 2015, but cut that earlier this year to 55,000.

He forecast vehicle sales next year of 83,000 to 93,000.

The company said it lost $184.2 million in the second quarter, compared with a loss of $61.9 million in the year-ago period. Revenue climbed 24 percent to $955.0 million, from $769.3 million, as car sales continued to rise. 

On an adjusted basis, Tesla said it lost 48 cents a share, less than the 60 cents analysts had expected. In the year-earlier period, Tesla said, it earned 13 cents a share on an adjusted basis.

With expenses still outstripping revenue, Tesla's cash reserves fell to $1.15 billion as of June 30, from $1.5 billion on March 31 and $1.9 billion on Dec. 31, bringing total cash burn in the first half to $755.0 million. 

Earlier this year, Ahuja said total cash burn for the year should be less than $1.0 billion.

I wonder when CFO Deepak Ahuja makes an announcement that he is leaving Tesla to spend more time with his family.

Don't Cry For Me, Argentina, Madonna