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Originally Posted by JSH
Stock price is critically important to Tesla. In March they have $1 billion in debt due. If Tesla stock is above $360 a share Tesla can convert the debt to stock. If the share price is below $360 a share then Tesla needs to come up with $1 Billion to pay off the bonds.
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AFAIK, Tesla can choose to pay cash, some combination of cash/shares, or convert notes to shares down to $252.54/share.
https://www.sec.gov/Archives/edgar/d...8614d424b5.htm
There are four situations where Tesla is required to pay all cash for the notes/interest, but those seem to all involve the company either going under or changing ownership.
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The fundamental change purchase price we are required to pay will be equal to 100% of the principal amount of the notes to be purchased, plus accrued and unpaid interest to, but not including, the fundamental change purchase date (unless the fundamental change purchase date falls after a regular record date but on or prior to the interest payment date to which such regular record date relates, in which case we will instead pay the full amount of accrued and unpaid interest to the holder of record on such regular record date, and the fundamental change purchase price will be equal to 100% of the principal amount of the notes to be purchased).
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Originally Posted by MetroMPG
I read an article that suggested cannibalized sales were the motivation behind Tesla recently re-jigging the battery options available on the S and X.
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That's one possibility. Model S/X sales in the US are above last year's total based on InsideEVs estimates, so I'm not sure how much demand the 3 is pulling away from those two. Another possibility is that they're going to automate a significant portion of the S/X line and tweak the S/X design to conform with the 3.
By effectively increasing the price of the S/X, they can reduce demand and fulfill a quarter or more of demand in less than a quarter, leaving them with a couple months to rework the cars/lines. IIRC, those two were still pretty high on labor hours per car, and now that they own Perbix and Grohmann they can automate and streamline whatever they want within reason.
More to the point, having lower margins with more cars produced suggests that they may not have sold as many ZEV credits to other car companies. If this is the case, then those companies are likely going to build more EVs to comply with the ZEV mandate, and to keep their competitive advantages, Tesla needs to reduce costs via more automation and better quality.