This idea isn’t as crazy as it might seem.
Khodrocar - If Tesla were to put up its logo as an asset for a loan, it could land the automaker billions of dollars, says at least one analyst.
In a long-winded article published by Automotive News, one small tidbit caught our attention.
Tesla’s decision to remain public may mean that a new capital raise is coming soon. This could be achieved by several different methods, but perhaps the simplest one is the idea of offering up just a logo as an asset for a big loan. Is it really that easy?
As Automotive News explains:
With demand for the electric-car maker’s bonds flagging, some have started pointing to the model that Ford Motor Co. deployed during the depths of its financial distress more than a decade ago. The centerpiece to this approach: Putting up assets, including the iconic Blue Oval logo, as collateral for cheap lines of credit.
Ford’s decision to put the Blue Oval on the line resulted in a valuation of the logo at some $8 billion at the time. A similar move by Tesla right now could bring half that amount in perceived value, according to Hitin Anand, an analyst at CreditSights. Anand states:
Pledge those assets and have that in your back pocket. It’s prudent to build liquidity.
Of course, there’s a lot to potentially lose here, but if Tesla stays afloat, it’s a simple method for securing credit.
In addition to the logo, Tesla has several other assets it could put on the line. The major ones include:
- Fremont Factory
- Gigafactory
Yes, it’s risky offering up so much, but there’s really no risk at all if we believe what Tesla wants us to in thinking profit is right around the corner.
Source: Automotive News
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