Hyperdrive
Tesla Bonds Are in Free Fall
- While stock drop gets the attention, bond rout has big risks
- Company is in ‘negative feedback loop; everyone is worried’
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Elon Musk’s creditors are suddenly having a serious bout of buyer’s remorse.
In August, they lined up for the chance to finance Tesla Inc.’s ambitious rollout of its Model 3 sedan. Wooed by Musk’s personal appeals, bond investors pretty much ignored the carmaker’s prolific cash burn and repeated failures to meet production targets and lent it $1.8 billion at record-low interest rates.