Whoopsy:
nberry:

Nick ,the incentive is Tesla, accelerated the EV credibility causing other car manufactures to jump in sooner than they were ready to do so. Losing Tesla now would send the wrong message. That said, our government is control by conservatives and I'm not sure they will want to save it.

 

Tesla did not pioneered that segment, Porsche had a EV car over 100 years ago, it's called the Porsche P1. It has a motor for each of the 4 wheels, something Tesla copied actually. Tesla championed that segment, but Tesla is not needed to sustain that segment. Most manufacturers already have EV car plans in their future, fully committed and financed, those plans are not easily axed. 

Losing Tesla won't kill that segment, it just proof to people that one cannot run a company recklessly and through smoke and mirrors. And losing Tesla means the market might actually expand. Tesla simply don't have the capacity to expand to meet demand of the lower price point car, others have and can, to make a EV car affordable, economics of scale is needed, parts sharing and stuff, GM, VW and others can do it by using parts from other cars, no need to bespoke everything for a cheap car, that lowers the cost immensely and can make a car profitable. 

Don't drag the conservatives into this one, as even the democrats would have had a hard time justifying saving a car company that's not unionized. Saving Tesla or not is a purely business decision, is it sound business plan to save a money black hole, a company that had never demonstrated they can actually make money making cars?

It sounds unlikely that there would be a "white knight" rescue for Tesla, particularly given the amount of debt outstanding and the poor track record in manufacturing. If the company fails to raise enough capital to remain solvent, it is reasonable to expect there would be a debt restructuring / writedown / debt-to-equity swap, e.g. via Chapter 11.

To state the obvious, if there is a financial restructuring at Tesla, it is entirely possible that the existing share class will be worth zero, as previous debt holders (e.g. secured lenders, bondholders) become the new de facto equity holders.

Maybe worth keeping in mind that where a stock price has previously traded means very little in a debt restructuring scenario. In that scenario, the ranking of creditors is key in slicing up the new capital structure and the ordinary shareholders face the ultimate risk of being wiped out. That is why shareholders should care when the Tesla bonds start trading materially below par. If bondholders are looking at a write-down in principal value, shareholders would be facing a write-off.

There could be a bidder to acquire the company / brand following a financial restructuring, as the debt would have been reduced and the equity market cap would be a distant memory... along with a bunch of customer deposits! Smiley