Analyst says Tesla is low on cash, dangerously so
Tesla is a candidate for stock market collapse this year, unless it can secure additional cash, Shinal said. Despite its sketchy numbers, Tesla has managed to move its stock value up more than 30 percent since early November, he acknowledged. Tesla's stock has moved within a tight range, between $33 and $35 a share.
Shinal said the Tesla's financials were worse off than struggling post-IPO internet companies Zygna and Groupon. "As of September 30, Tesla had cash and short-term securities of $86 million, down from $280 million at the start of the year," he stated. "That leaves Tesla with less than six months' worth of cash, given that it burned through almost $200 million during the first nine months of 2012." Tesla had "no comment" about all this when contacted by AutoblogGreen.
Tesla Motors very much needs strong sales of its Model S, and to do that it will need to continue to ramp up production so sales meet the company's funding needs. Tesla might also need to find more outside investors, similar to the relationships established with Daimler and Toyota. Tesla could tap into its reputation for providing advanced electric vehicle powertrain technology, and could seek investments from other established automakers.
Despite Shinal playing Chicken Little, Tesla's financial conditions were starting to look a bit brighter in late 2012. It is paying back its federal loan earlier than anticipated and has indeed started ramping up production volume to take advantage strong demand. We agree with Shinal that 2013 will be a benchmark year for Tesla, whichever way things go.
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