Tesla Runs into Headwinds

Tesla Motors Inc. (NASDAQ: TSLA) may be in for a rough trading day on Tuesday. With headlines about lower production, the real issue is a share sale, and perhaps a change in its loan program with the government.

The luxury electric vehicle maker has warned of a slower-than-expected ramp up in production in 2012, and it warned that revenue will now fall in the range of $400 million to $440 million. Third-quarter margins will also be negatively affected. Tesla did say it still anticipates producing 20,000 Model S (sedan) deliveries for 2013.

Another report shows that Tesla has filed to raise up to $150 million via the saleĀ of common shares, and now the sale is set at 4.344 million shares. CEO and Founder Elon Musk has indicated a preliminary interest in buying up to $1 million of the stock sold at the offering terms. The filing stated:

Unless the applicable prospectus supplement indicates otherwise, we intend to use net proceeds from the sale of the common stock offered hereby for general corporate purposes. We may temporarily invest funds that are not immediately needed for these purposes in short-term marketable securities.

Tesla also has a SEC Filing showing that it has a change in terms on its Department of Energy loan. The filing stated:

On September 24, 2012, Tesla Motors, Inc. (the "Company") entered into an amendment (the "Amendment") to the Loan Arrangement and Reimbursement Agreement between the Company and the U.S. Department of Energy dated as of January 20, 2010, as amended, to modify the timing of our current ratio financial covenant and funding of the Company's debt service reserve account and add a covenant requiring us to work in good faith with the DOE to develop an early repayment plan for our outstanding DOE Loan Facility on terms satisfactory to the DOE. The full text of the Amendment is attached hereto as Exhibit 10.1 and is incorporated herein by reference.

Tesla shares are down to less than $28.00 in early-bird trading, after closing at $30.66. The 52-week range is $22.64 to $39.95.

JON C. OGG


Filed under: 24/7 Wall St. Wire, Autos, IPOs & Secondaries Tagged: TSLA

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