Imagine my plight: I, a full-grown American male, would like nothing better than to do my own laundry. But where is the detergent for me? Everywhere, the scents are flowery meadow this, springtime seabreeze that. Finally, a new contender emerges—FREY enters the fray—and I am liberated at last.
The slow-motion crash of Tesla Motors continues. Last week, an insider revealed the electric-car maker, once the best hope of Silicon Valley's nascent clean-transportation industry, had only $9 million in the bank. Now, Elon Musk, the investor who recently deposed the company's CEO, claims the company has commitments for another $40 million in financing from some of its current investors, a group which includes Google cofounders Larry Page and Sergey Brin and former eBay president Jeff Skoll. But that money is debt, not equity.Current Tesla shareholders have 30 days to choose, through a process known as a rights offering, whether to fund the debt, which is convertible, at a later round of financing, to shares. Tesla thereby avoids setting a new, presumably lower valuation for the company — almost a certainty if it had issued new shares, given Tesla's straitened financial condition. But the reality remains: Having raised $146 million in venture capital and tens of millions of dollars more from customers putting down deposits on the $109,000 Roadster, Tesla is now sinking into debt. In January, it may obtain a $200 million loan guarantee from the Department of Energy — meaning that it will be borrowing more cash. $9 million in the bank now, with $240 million in debt to come: Tesla will soon resemble, in miniature, the stumbling Detroit giants it hoped to overturn.
