Tesla Rallies on Plans to Raise Capital

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Electric car company. Tesla is seeking to raise as much as two point three billion dollars through stock and bond sale. The effort comes after tesla suffered one of its worst quarterly losses ever with its cash on hand falling by more than forty percent to two point two billion dollars. Joining me now via Skype from San Francisco with more details is Wall Street Journal. Reporter Tim Higgins, Tim tesla. CEO Elon Musk heads signal during last month's earnings, call oh new willingness to consider raising capital which marked something of a reversal for him. What can you tell us about the company's current plans to raise money, you're almost has really been against the idea of raising more money. The plan is he'd laid it out was that the company was started to produce the model three the compact sedan at a rate that they could start selling them in generating the money, the company need for its vicious growth plans and would need to raise money, and that's been kind of a key pillar that he's kind of laid out. There for a while. But the first quarter didn't turn out the way that the company expected and really was a lot worse than analysts had intimidated and ate into a big chunk of that cash. So it yet again created this pressure point on the company about where their cash was going to be at the end of of coming quarters and would they have enough money without raising again. So you knew willingness to raise money in this effort to raise two point three billion dollars should alleviate some of those concerns in the near term. And if if Tesla's projections are correct that they'll become cash flow positive again and start to turn a profit in the third and fourth quarter. Then you could really start to see kind of a turning down of that pressure. What is tesla said about fixing the problems it had regarding deliveries of the model three in the first quarter? We did hear on that earnings call that tesla doesn't expect a profit in the second quarter. You mentioned that they. Do expect in the third and fourth. But what about those delivery problems the challenge in the first quarter was that tesla has one assembly factory, and that's in California, and it was sending the model three to Europe and China for the first time, and it ran into more delays in anticipated and weren't able to get the cars into customers hands

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