What should Tesla do? Sell stock of course

What should Tesla do? Sell 5 to 10% more equity

Tesla’s balance sheet showed equity value of 4.18 Billion dollars in the 1st quarter of 2017. Its market cap of 50 billion dollars means that that it can shove billions of dollars of stock into the warm arms of the investor class. The company might end up being a walking zombie, but with another 2.5 to 5 billion dollars it can extend its life for a couple of years at what is an insanely high valuation. In other words, if it were not for the market premium , such large amounts of cash would be a pernicious dilution of owners equity, meaning, it wouldn’t happen.

 

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