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Comment by softbuilder | Hacker News Reader

Tl;dr - that debt is in convertible bonds and if the stock goes up a few bucks most holders will presumably opt to convert to owning Tesla stock.

Doesn't that just dilute the stock?

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Yes.

Which is why Musk said repeatedly that they will reimburse the debt with cash flow.

musk says a lot of things. it will be interesting to see how it plays out with a former-cfo chairperson.

It's best to review Musk's goals over the longest term possible, because who cares about being late for a few of the objectives if they are widely exceeded soon after the deadline?

I invite you to re-read the early presentations for the Model S and Gigafactory. Question: of the goals that have been achieved and those who haven't, which are the most important? And for the less important, are these delays interfering with Tesla's mission or just a temporary postponement to further focus on things that matter (e.g displacing oil and disrupting fossil fuel investment plans)?

Only if they have to issue new stock to cover the conversion. I imagine the company has these shares in reserve.

"Outstanding shares" in the definition of earnings per share et al only count shares held by shareholders, not shares held in the treasury. So it is dilution whether the shares came from a reserve or new issuance.

based on a quick peek at their financials, it seems tesla has zero treasury stock in reserve, so the conversion would be fully dilutive.

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