By CCN: The frustrating thing about con artists is that they just keep fleecing suckers until the liquidity dries up. In the case of Elon Musk and Tesla, it appears that there is still an ocean of suckers out there.
Fans of “What Will Elon Musk Lie About Next?” will not be surprised that Tesla’s announced $2.8 billion capital raise comes despite Elon Musk’s declaration that Tesla wouldn’t be raising any more capital.
Savvy followers of Tesla stock and Elon Musk expected this move, because Tesla had to pay off a $920 million bond in March.
Elon Musk’s Paltry Stock Buy Exposes Lack of Faith in Tesla
The Tesla stock capital raise includes the sale of $750 million of stock and $1.6 billion of senior convertible notes due in 2024. Of this amount, Musk is only going to buy $25 million worth of shares, which screams his lack of confidence in his own long-term plan.
Or maybe it’s because Elon Musk couldn’t afford to buy more Tesla stock. His latest debt disclosure shows that he owes more than $500 million to banks, which is collateralized by Tesla stock and by his own personal holdings.
— Machine Planet (@Paul91701736) May 3, 2019
Those banks include Morgan Stanley, which is underwriting the capital raise.
So in the crazy hall of mirrors of the Elon Musk carnival, it means that the banks Musk owes money to have a conflict of interest. They are hyping the capital raise, because that supports Tesla stock, which is what supports their loans to Elon Musk.
Elon Musk: P.T. Barnum’s Con Man Heir
The reason this is important is that Elon Musk knows how to hype his product, get big investment, make big promises, and ultimately fail to deliver on them. This forces investors to throw good money after bad, in order to keep their initial investment from possibly failing. Before long, they’ve…