Tesla says it may need to raise funds from outside sources

Less than a week after reporting a quarterly loss of more than $700 million, Tesla on Monday said it may have to look of alternative financing sources as it continues to revamp its product line and prepare for the eventual launch of its Model Y crossover vehicle.

In its first-quarter report, filed with the Securities and Exchange Commission, Tesla said that it continually evaluates the funding its neess for captial expenses and that it “may decide it is best to raise additional capital to fund the rapid growth of our business.”

Tesla didn’t say how much financing it might need to raise. However, the company tried to assuage concerns that investors might have about its financial state by adding that its current sources of financing, along with the cash it expects to receive from its ongoing business operation, “will provide us with adequate liquidity over at least the next 12 months.”

Last week, Tesla reported that for its first quarter, it lost $702 milllion, or $4.10 share for the period that ended March 31. Excluding one-time items, Tesla lost $2.90 a share–more than twice the $1.15-a-share loss forecast by Wall Street analysts. Revenue for the first three months of the year rose to $4.5 billion from $3.4 billion in the year-ago quarter, but also fell by 37 percent from Tesla’s 2018 fourth-quarter sales of $7.2 billion.

On a conference call to discuss Tesla’s results, Chief Executive Elon Musk said it was “about the right time” for the company to explore raising more capital.

Dan Ives, managing director at Wedbush Securities, took a harsh view of Tesla’s results, and outlook, calling the company’s results last week “one of top debacles we have ever seen.”

“The demand story at Tesla is quickly changing and the company has unfortunately not adjusted to an evolving EV (electric vehicle) landscape, especially in the U.S., with the well thought out marketing and distribution logistics needed to manage this difficult and complex hand holding process for customers, employees, and investors,” Ives said.