With Tesla Inc (NASDAQ: TSLA) shares up about 17% over the last two trading sessions and up 80% just one month into 2020, one analyst made an interesting call Wednesday.
Equity Capital Raise To Pay Off Debt
Cascend Securities' Chief Investment Strategist Eric Ross said Tesla's “renewed access to equity capital could reduce their debt load significantly.” The strategist believes paying off debt via an equity capital raise could be accretive to the company's calendar year 2021 earnings by about $1 per share.
“With $13.5 billion in debt, a $20 billion raise would dilute valuation by roughly 13.5%,” Ross suggested. He pointed out the offering would help remove risk from the company's model and also leave Tesla open to future debt financing with …
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