What’s Tesla’s Logo Worth? Analyst Says Billions

AUG 30 2018 BY ERIC LOVEDAY 18

This idea isn’t as crazy as it might seem.

In fact, it’s been done before by a company called Ford.

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

Categories: Tesla

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18 Comments on "What’s Tesla’s Logo Worth? Analyst Says Billions"

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William

Tesrillions!

In Muskoin Cryptocurrency, it’s hard to put a tangible valuation on The Tesla logo!

Dam

Beside Male Geek Circle in US mainly, Tesla is almost unknown.My wife or her friends would have no clues about this company (unlike Mercedes or Porsche)

Nix

I don’t really think this has anything to do with gender, I know plenty of women who Geek EV’s, even if they don’t post under female sounding forum names.

I’m not sure about YOUR wife or friends in specific, but the old cliche about women not knowing anything about cars, and it is all just a good old boy’s network seems like shallow outdated thinking in these times.

Get Real

For some people, being uninformed is bliss.

antrik

I don’t know about your bubble — but according to a recent-ish study, Tesla is already more prestigious among the younger US population (not just “male geeks”) than all the traditional auto brands.

Kbm3

Just the number one aspirational vehicle for people under 30.

Dam

“Tesla has several other assets it could put on the line. The major ones include:

Fremont Factory
Gigafactory

No, Fremond is already pledged for LOC and Giga is mostly owned by Panasonic (they can even stay rent free in the even Tesla disappear)

Doggydogworld

The Credit Agreement was amended to allow Fremont to be added as collateral, but I have not heard that they actually added it yet.

You’re right about the GF. A building with a tenant who has a long-term lease at a nominal rate (e.g. $1/year) has little value as collateral.

I also think it’d be very tough to find a bank to lend solely against the logo. It’s much more mercurial than the century-old blue oval.

Dsm

If I remember Fremont is pledged with Deutsche Bank

antrik

There is way more to the Gigafactory than just the building, though… The cell lines are owned by Panasonic; but the module lines, drive train production, Powerpacks/Powerwalls are all Tesla.

Dav8or

They should just spin off the logo as it’s own company and then offer an IPO on the logo! All the fans could buy shares in the logo and they could have release parties for all the new products that would have the logo on it as well as all the future versions of the logo. It could get bigger and more profitable than the car company!

G2

Following FORD’s financial plan sounds like a path to the poor house.

TomArt

It worked for Ford – very well, in fact. They survived the recession without a bailout because they leveraged everything while credit was still cheap and easy.

zzzzzzzzzz

Yes indeed it worked for Ford. But Ford had sound business that was temporary down because of recession. Tesla has increasing losses at the cyclical auto-market peak, with market downturn inevitably coming sooner or later.

Overall it looks like some deadbeat bringing family silver to a pawn to get some money to pay off credit card payment, and hoping he will win lottery before next payment is due. It is possible to win lottery after all :/

antrik

For a company struggling to meet existing demand, cyclic downturns are meaningless.

BroncoBet

You are correct, they are struggling. Joe Namath “Struggling”.

Nix

Ford had $5.9 Billion in ATVM Gov’t loans, and $15.9 Billion in Fed Bank bailout money in their pockets on top of what they leveraged. And their suppliers got bailouts just like every other companies suppliers got bailouts under the TARP “Auto Supplier Support Program”.

That is why Ford testified to Congress that the bailouts were necessary to save the automotive sector. Ford;s false meme that they didn’t get bailouts was debunked when Bernie Sanders got his bill to audit the Fed Bank passed, and the audit exposed all the additional monies that went to Ford.

Although i’m still not sure why people bad=mouth the bailouts. They successfully turned around the death spiral in the economy, AND the bailouts have turned more than a 10% profit.

Rolando

The easy way to finance new factories in (1) China, (2) Europe, and (3) in the USA (for producing model ‘Y’ , Semi, pick-up, roadster ) would be issuing new shares, but Elon Musk don’t like watering down his 20% stake – otherwise Softbank or Saudi-Statefund would have already provided ample funds for this extensions month ago. And those potential external investors don’t like a Mark Zuckerberg style “Facebook-super-shares” setting for Tesla.

With negative cash flow and approx 10 billion loans – the financial options for urgent factory expansions is rather limited. It will be interesting to see how the Nov-2018 and March-2019 maturing convertible bonds will be paid back.