No matter how rosy your income statement, if you run out of cash, the GAME OVER screen comes up and people laugh at the glowing biographies folks wrote about you and your company in $PREVIOUS_DECADE. And while your accounts payable will often deal with being fobbed off for a bit, it becomes harder to do this. And certain folks expect cash, now, and can force you to cough it up: foremost being the government, but also employees (hard to do things when people quit en masse) and key suppliers (if the electricity goes off, or the parts don't arrive, you have to shut down the line).
If you look at the real market the trend is clear: There has never in the history of the stock market ever been a time when investors were more willing to invest in money-losing companies to gamble on them hitting it big. Tesla is valued by the stock market as twice as valuable as the Ford Motor Company.
It baffles me why he publicly listed Tesla in the first place if he didn't want to "play stupid financial games".
Ok so he wants to take it private - is funding secured or not?
Sounds like a violation of SEC rule 10b-5 and possibly illegal.
Well, yeah, and there are already lawsuits charging that.
> “These are very difficult cases to prove,” said Mr. Stark, who runs a cybersecurity consulting business.
https://www.nytimes.com/2018/08/13/business/dealbook/tesla-e...
because, based on rational math, if you add this expense and minus that, the result is 0 in 3 months. QED
now that bankruptcy sounds unlikely, all the news articles are focusing on how a tweet could be illegal
(The money was on Tesla either blowing it out of the park, or going broke in 2019/2020.)
In other words: 3 months ago no one was saying Tesla would be bankrupt by August/September.
And here's the thing: if Musk was truly honest about Tesla not seeking financing or offering new stock in 2018, they are on track for bankruptcy by the end of the year based on currently available investor documents re expense, cash flow, assets, etc.. If those documents are wrong, it's incumbent on Tesla to update them, not on the rest of us to assume voodoo financial magic will save the day.
The point is, all the articles raising alarm bells saying Tesla is going bankrupt SOON, it will run out of funds, it will collapse. Because math.
Now, all the articles are focused on SEC rules for a tweet.
I would highly recommend not to admit this, because it's illegal as hell.
There's no way he would ever admit this, but I bet one of his motivations for posting that tweet was to move the stock and hurt the shorts.
Musk seems to be one of those classic "force of nature" founders, whose will to overcome obstacles and prove everyone wrong is essential to getting off the ground, but could be a liability in a mature company.
"Oh, yeah? Try and stop me!" works great until you run up against someone who can actually stop you (often, the government).