By CCN.com: The big news of the day is that Elon Musk can afford toilet paper. The South African billionaire is aggressively cutting costs as Tesla’s stock continues to reel. Based on reports, it appeared that the Tesla CEO’s austerity measures didn’t spare the company’s washrooms.
But Elon Musk dismissed Electrek’s claims, saying they were “complete nonsense.”
Elon Musk has a net worth of nearly $20 billion. So the idea that Tesla has started curtailing toilet paper supplies is nothing short of a major embarrassment for Musk, and it was only a matter of time before he denied the same.
But Electrek’s Fred Lambert, who got the scoop, defends the story.
Lambert in his article claimed that “sources” told the publication that cost-cutting measures at “several Tesla facilities” extended to”skipping ordering office supplies – even toilet paper.” As a result, they claimed that employees were bringing their own into the office to help out.
Elon Musk had called for a “hardcore” effort to cut costs, as Tesla runs the risk of running out of cash in the next 10 months at the rate of its current cash burn. The company lost $700 million in Q1, translating into a monthly cash burn of well above $200 million.
Tesla recently raised $2.4 billion in a stock offering, with Musk initially indicating that the money will be used for funding ambitious projects such as autonomous cars. But the real picture emerged, revealing Elon Musk’s desperate attempt to review “literally every payment” that leaves the company’s bank.
So, Lambert’s sources on the ground who claim that Tesla employees are bringing toilet paper to work could be true, as the electric vehicle company has been accused of being a toxic workplace in the past.
Wall Street has turned against Tesla’s stock in recent days.
Morgan Stanley predicts that TSLA could drop to as low as $10 in a worst-case scenario. The investment bank says that weak demand for Tesla cars will hurt the company’s financial performance and limit its ability to fund growth through free cash flow.
As Tesla’s stock declines further, there will be a limit to Musk’s ability to raise money because no one would want to invest in a sinking company. Such an eventuality has spooked Tesla’s major investors.
T. Rowe Price, a top Tesla investor, dumped 81% of its TSLA holdings earlier this month. This wasn’t surprising considering Tesla’s stock has caused a massive loss to investors this year; it might be headed lower because a major catalyst won’t be kicking in.
Elon Musk was betting big on autonomous cars to drive Tesla’s fortunes, predicting that the stock could hit $2,900 in the long run on the back of a $500 billion market cap.
But he doesn’t seem to have the money to achieve his dream of putting a million robotaxis on the road by next year, as he is busy stretching every dollar at Tesla – whether or not it involves cutting toilet paper supplies.
Last modified: July 2, 2020 7:41 PM UTC