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Tesla stock surge puts convertible bonds in the money

Elon Musk's tweet has had a salutary effect on his company's financing position - particularly its $2.3bn in two convertible bonds

Elon Musk speaks on stage during the Westworld Featured Session during SXSW at Austin Convention Center, 2018
Elon Musk speaks on stage during the Westworld Featured Session during SXSW at Austin Convention Center, 2018 Photo: Getty Images

The surge in Tesla’s shares after CEO Elon Musk’s tweet about going private has had a huge, salutary effect on its key convertible bonds and its financing position.

By pushing the common stock’s price above the $360 level, his tweet has put a $900m convert issue above its conversion price, which would effectively let the electric-auto maker pay off that obligation in stock instead of cash.

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