IIRC the inventory was being lent out at 85% of value to satisfy the 400m floor, so if there is a writedown on the inventory then that would make them technically in default.

However, I am not an accountant and I am not 100% sure how their ABL worked so I don't know if that is truly the case or not.

The ABL will have covenant ratios that must be reached. If you fail a covenant there is often a penalty. If their ABL is reliant on AR then the financer won't like it, but it's probably not the end of the world if there was a write down

If the ABL is inventory base then the financer will be significantly more Leary of what's going on. ABL financers can audit the **** out of companies they finance so it could be a big fight coming up

In situations like that borrowers typically just get a waiver and lenders, if possible, just get some concessions.

Lenders aren't really interested in sinking Tesla for obvious reasons. Isn't there a adage/proverb along the lines of if you owe the bank $1000, it's your problem. If you owe the bank $100 million, that's the bank's problem?

That should be foremost on your mind whenever you start thinking a debt payment is going to sink Tesla while Tesla's market cap is still well in excess of total debt on its books.

Agree with grizy for once.

It's a game of musical chairs and no wants the music to stop. By the end, Enron was financing operations with loans for 24 hours because no one would loan for longer any more. Tesla are a decent chunk away from that.

Musk has a talent for getting losers to give him money and that'll stretch a little further until total demand death becomes obvious to all. If there isn't demand for 500K Model 3s/year then Tesla are done and Musk goes bankrupt as well given that he's down to mortgaging his houses for a pittance in cash, and none of the big banks will loan him against SpaceX shares.

Inv write downs won’t default the ABL. Might devalue borrowing base assets but lenders already have latitude with reserves and collateral audits.

Coordi, no maintenance covenants on the ABL. Collateral is mainly inventory (new) cars, but I think AR is eligible as well.

Either way, agree w grizy that ABL lenders aren’t going to do anything crazy or pick a fight here.

Institutions dumping on the retail bag holders here.

This is fun. I still think elon will get a pump/cash injection with Model Y and morons putting $2500 down. But nobody is buying the overall story of this stock anymore it seems.

And if it breaks 250 then even the "trading range" people will no longer buy and ol elon will run into some margin calls.

Do I cover my short from ~305 or wait

Both. Cover half.

I didn't have any info on the specifics last night, but yea, seems like everything in regards to the ABL is fairly normal for the industry.

Stock is finally moving in the bears direction - only took it two years. Where is the bottom?

I covered first thing Monday morning expecting a Model Y pump, before I read the China news.. ouch.

"I think no other company has pivoted from an Apple to an Amazon strategy quicker than Tesla. Take all the (short-term) margin versus take the whole market."
TMC forum keeps delivering. Like half of the comments are just next level stupid.

Funding secured fraud was a bigger slide ($370->$250) and what, 6 months ago? The correct response to that hinged on knowing that Musk was a liar and a fraud, as the bears had always claimed. NYT crying interview was an easy 5 bagger and even sooner than that. Tesla is the gift that keeps on giving.

Musk has done a stellar job of propping up Tesla with lies and (actual) securities fraud and who knows what else behind the scenes, longer than I thought he could, but you can't fake demand. Which was always the bear thesis. He can't make a profitable $35K car and once high end demand dies then Tesla is in the toilet because the world where they need tiny amounts of capital relative to market cap and have a monopoly on expensive performance sports cars is over.

By the way - the iPace that you rubbished is kicking Tesla's ass in two European markets and eating it in numerous others because it's a superior product. Tesla have dropped their high end prices more than 25% in iPace markets, from $140K to $95K, wiping out huge sums of pure profit.

In the Netherlands alone in the last three months of 2018 - a single country! - Tesla missed out $300 million revenue at least and maybe $100 million gross profit. Why do you think they're desperately dropping prices so much?



Tesla can't even make a car as good as Jaguar's first try with a 10 year lead. This is Tesla's future even if they can raise enough to make it out of the situation they're coming into now with Model 3 demand in trouble.

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TS,

I hope you know that the iPace was not sold before the 4th quarter, but promoted for way longer than that. Paired with the fact that it was due to a tax credit running out, this is not recurring.

In any case, a successful iPace doesn't take money away from Tesla, it actually helps Tesla. But I know you have not even a fundamental understanding of business.

Oh, you mean like 2018 Model 3 sales? At least you seem to have learned one thing from all of this.

Thanks for getting me up to speed on the dynamics of that. Can we apply that observation to anyone else?
Awesome, just awesome.

Is this like how Tesla actually has unlimited demand, but people simply don't have the money to buy one?

Missed this one. No dude, this is a fact. The only person who "makes **** up" here is the liar and fraud, Elon Musk. You can go to the website yourself and compare vs a snapshot from days ago vs the price now. But this is easier:

Huge Tesla price cuts make top Model S and Model X over £40,000 cheaper

I actually understated the magnitude of the enormous drop, bro.

Why do you think the stock is tanking? The price cuts are so extreme that it's clear even to the dumber institutions that Tesla is in deep, deep **** and desperate for immediate cash if they're cutting their supposedly supply-limited flagships by more than $50,000/>30% in many places. These institutions are offloading to the idiot, low information retails who are buying with this drop.

This price drop has happened all over Europe by the way. I confirmed personally by comparing the the before and after websites for France and Germany.

With customers like this...

https://arstechnica.com/cars/2019/03...-self-driving/

TS,

First of all, where is your 140 to 95 coming from? Second, you are talking about the UK where the currency has actually made recent gains. The prices cuts in other countries are closer to $20k.

The 140 to 95 is still completely made up, not sure if you are too dumb to convert UK prices to dollars. In any case, it's a TS classic. Take some article that fits your narrative and sell it as fact. Why are you not using US prices where most cars are actually sold?

Where have I said anything to the realm that a $3,750 price cut wouldn't at least have some impact?

From the German price cuts. But it's the same all over Europe. 150k euro to 99, 145 to 95, 140 to 90 depending on market and options.
This is just a straight up lie.

It's a stone cold fact. You are so ****ing deranged and these facts are so damaging to your thesis that you've gone into full denial. Everyone but you can see this man.
Because in the bit you replied to I was talking about the iPace's effect in Europe. It's right there:
And wow on still questioning it? You really a rolled gold moron. Literally a worthless piece of ****. I laid out the facts in detail for you and you still dispute them...this is your counterparty folks....someone with his head so far up Elon's/his own ass he disputes undeniable verifiable uncontentious facts.

The price cuts for the high end in France are >40K euro
The price cuts for the high end in Germany are >40K euro
The price cuts for the high end in the UK are > 40K euro

Here's Elektrek, a Tesla cheerleader, documenting the cuts and backing up my statement:

Here's Tesla Motors Club, a forum for Tesla oners:

Again, I understated the magnitude of the cuts.

More for you, from Tesla Motors Club, again a forum for owners, many enraged/disappointed that their cars are now devalued by >30%:

Massive Price reduction???, Germany, 99k Ludicrous?

You can actually look up old used prices which are now $30-40K euro more than a new one because of the massive price drops. Owners are livid.

InsideEVs: Tesla Slashes Model 3, S & X Pricing In China: Up To $51,000 Less

Your denial is getting to the level of being seriously deranged. WTF is wrong with you? But it's also a telling sign of how big this news is: if you can't accept it's real, what does it say to your long term bull thesis, in which you've invested so much time and energy?