A defiant Tesla Inc (Nasdaq: TSLA ) CEO Elon Musk has once again set a bold near-term target for Tesla, and this time it would be a major financial milestone. Musk provided shareholders with some unconventional financial guidance early Friday morning, tweeting that Tesla would be cash-flow positive and profitable by the third quarter of this year.
Earlier in the evening, The Economist tweeted that "Tesla will need to raise $2.5bn to $3bn this year, according to Jefferies, a bank."
Later that night, Musk returned fire at The Economist.
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"The Economist used to be boring, but smart with a wicked dry wit. Now it's just boring (sigh). Tesla will be profitable & cash flow+ in Q3 & Q4, so obv no need to raise money," Musk wrote.
In its first-quarter vehicle delivery update, Tesla yet again missed its Model 3 production target. However, after Moody's downgraded Tesla's corporate credit rating in late March, investors took comfort in the fact that the company said it would have no need to raise capital in 2018.
Jefferies isn't the only firm that's skeptical about Tesla .
"With our expectation for a softer Model 3 production launch curve, we see the company likely needing to raise capital in 3Q18 to maintain an adequate cash cushion," Goldman Sachs analyst David Tamberrino wrote earlier this week.
When a Twitter follower posted a link to an article quoting Tamberrino, Musk replied with a cryptic tweet of his own. "Place your bets…" he wrote, seemingly challenging Tamberrino's conclusion.
Vertical Research Group analyst Gordon Johnson also said this week that Tesla will need to raise cash by the end of the current quarter.
"Despite TSLA's claim it does not 'require' debt/equity in '18, our cash flow analysis suggest TSLA will tap the capital [markets] for $2 to $3 billion in [the second quarter], diluting shareholders," Johnson wrote this week. He also said Tesla would need between $4 billion and $5 billion in additional capital to fund its longer-term growth initiatives.
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In an interview with "CBS This Morning" earlier this week, Musk said he has been sleeping on the floor of a Tesla factory to save time commuting.
Jefferies has a "hold" rating for Tesla. Goldman Sachs has a "sell" rating and $195 price target for Tesla. Vertical Research Group has a "sell" rating and $84 target for TSLA stock .
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