Just one week after Tesla Inc.’s much-ballyhooed $1.8 billion bond issue and the notes are trading underwater, leading some to question the pricing of the deal.
The high-yields bonds were reported to have attracted strong demand, with the underwriter Goldman Sachs increasing the size from an original $1.5 billion. Investors appeared to find comfort in Tesla’s TSLA, -1.27% market capitalization of $57.9 billion, which makes it the nation’s biggest car company measured by that metric.
General Motors Co. GM, -0.49% currently has a market cap of just $50.8 billion, while Ford Motor Co. F, -0.75% has a market cap of $42.1 billion.
Moody’s rated the credit at B2, placing it a full five notches into speculative, or “junk,” territory to reflect what it described as “sizable near-term credit risks” associated with Model 3 production and sales.
There's no way Tesla should be anywhere close to the size of Ford and General Motors because they produce a fraction of the cars on the market but you have big money from the club and government pushing electric and self driving cars. I think they are pushing these vehicle as form of social control instead of actually for the environment. I can see government restricting area of travel during so called 'emergencies' and your car will stop working or they will keep you from traveling off main roads.
Anyhow, Tesla can have these high bond yields and big production goals because the government will just bail them out if they need money or their friends on Wall Street will just inject money into Tesla stock to keep them propped up with the illusion that they are popular and the future of the car industry.
