Tesla Bonds Reach New Low, Stock Falls Further After Downgrade, Accident

Heavy selling of Tesla Inc. TSLA -7.67% shares and bonds persisted Wednesday, posing a new challenge to the electric-car maker that has relied on the faith of investors to meet pressing cash needs.

The company’s shares fell $21.40, or 7.7%, to $257.78, extending a weekslong decline that deepened Tuesday amid broad weakness among technology stocks, increased scrutiny of the company’s semiautonomous driving system, and a credit-rating downgrade from Moody’s Investors Service.

Tesla’s 5.3% unsecured bonds that mature in 2025, issued last August when the company’s stock price was near its height, touched a low of 86 cents on the dollar—translating to a 7.8% yield—before ticking up to 88 cents, according to MarketAxess.

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The concerns about Tesla’s value come as investors take a harsher look at some other companies that helped drive stock indexes to records earlier this year, including tech giants Facebook Inc. and Google parent Alphabet Inc. GOOGL -0.17%

The situation is especially noteworthy, because Tesla’s near-term financial viability depends on its access to the capital markets. The company, investing heavily to bring out its mass-market Model 3 sedan, burned through on average about $1 billion in cash each quarter last year, and analysts expect a similar pace this year until production kicks into a higher gear and generates new revenue.

Tesla’s $1.8 billion unsecured bond issuance last August was part of a wide-ranging search for cash that has also involved repeated equity raises and sales of convertible bonds and asset-backed securities. Unlike most corporate-bond offerings, which are marketed based on credit metrics such as free cash flow and debt-to-earnings ratios, Tesla’s bonds originally met strong demand from investors in part because of the company’s eye-popping stock valuation, which suggested it could always raise cash from other sources.

Tesla’s latest run as a stock-market darling has only recently met turbulence. Its shares soared 46% last year, pushing its market value above that of Ford Motor Co. and General Motors Co. —profitable auto makers with more than 100 years of experience and far more sales.

Investors endorsed Chief Executive Elon Musk’s vision that Tesla will be at the vanguard of a world with all-electric cars that drive themselves.

Created with Highstock 6.0.4SkiddingPrice of Tesla’s 5.3% bond due 2025Source: MarketAxess

That vision, however, is now being tested. On Tuesday, Waymo, the self-driving unit of Alphabet, said it would buy as many as 20,000 all-electric SUVs from Jaguar Land Rover to deploy as part of a robot taxi fleet. The deal is a direct threat to a Tesla self-driving technology unit that already has been racked with turnover.

Also on Tuesday, the National Transportation Safety Board opened a second investigation into a Tesla crash, this one a fatal incident last week near Mountain View, Calif. The agency said it is unsure if Tesla’s semiautonomous system was in operation during the crash. Tesla, while touting the record of its Autopilot system, said it hadn’t been able to access the vehicle’s computer logs to understand what happened.

The Waymo announcement and NTSB investigation both help “reinforce our view that [Tesla] is behind the curve in autonomous driving,” undercutting the bullish case for its stock, Brian Johnson, a longtime automotive-industry analyst for Barclays, wrote in a note to investors on Tuesday.

Adding to Tesla’s woes, Moody’s on Tuesday lowered its ratings on the company by one notch to B3. It cited Tesla’s “large negative free-cash flow,” looming debt maturities and “significant shortfall” in the production of its Model 3 car.

Investors should get better insight into Tesla’s operations next week, when the company is expected to release first-quarter production numbers. Mr. Musk has targeted making 2,500 Model 3s a week by the end of this month on the way toward making 5,000 a week by the end of June, a goal he has twice postponed.

Tesla will continue burning cash until it maintains the 5,000-a-week pace for an entire quarter, UBS analyst Colin Langan has calculated.

Mr. Musk has long defied skeptics with his ability to create enthusiasm for an electric-car brand. “Tesla is absurdly overvalued if based on the past, but that’s irrelevant,” he wrote on Twitter last April when the auto maker overtook Ford in market value. “A stock price represents risk-adjusted future cash flows.”

Many investors remain optimistic about Tesla’s prospects. Despite recent declines, Tesla’s 5.3% bonds still trade comfortably above levels that would suggest investors are concerned about an imminent liquidity crisis. Its shares traded recently at roughly 3.6 times its sales from the last four quarters, compared with a price-to-sales ratio of 0.3 for Ford, according to FactSet.

This week’s selloff “doesn’t make us question the long-term thesis of the company,” said Tasha Keeney, an analyst at Ark Investment Management, a New York-based investment firm focused on disruptive technologies that has been adding Tesla shares to funds in recent days.

Ark’s projection is that falling lithium ion battery costs will make electric vehicles cheaper than gasoline-powered cars by the early 2020s—enough, Ms. Keeney said, to cause Tesla’s stock to double over the next five years.

Corrections & Amplifications
An earlier version of this article misspelled the company Tesla as Telsa on first reference. (March 28. 2018)

Write to Sam Goldfarb at sam.goldfarb@wsj.com and Tim Higgins at Tim.Higgins@WSJ.com

Appeared in the March 29, 2018, print edition as ‘Tesla’s Shares, Bonds Fall Further.’

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Texas explosions work of serial bomber

AUSTIN, TX (RNN) – Police in Austin, TX, are responding to an incendiary device that left one person injured Tuesday night.

Initial reports from the Associated Press indicated another bomb had exploded in the city. Police later tweeted that was not the case.

#UPDATE: There was no package explosion in the 9800 block of Brodie Ln. Items inside package was not a bomb, rather an incendiary device. At this time, we have no reason to believe this incident is related to previous package bombs. #Breaking #packagebombmurders

— Austin Police Dept (@Austin_Police) March 21, 2018

The Austin-Travis County EMS described the victim as a man in his 30s but did not know the extent of his injuries. They do not, however, anticipate his injuries will be life-threatening.

Earlier, FedEx confirmed in a statement that a package detonated at a San Antonio-area FedEx ground facility early Tuesday morning.

The company also confirmed that the person responsible for sending it also shipped a second package, which was secured and turned over to law enforcement.

The FBI said Tuesday evening that the suspicious package, which was sent to a FedEx shipping center near the Austin-Bergstrom International Airport, contained an “explosive device,” the AP reported.

“We have provided law enforcement responsible for this investigation extensive evidence related to these packages and the individual that shipped them collected from our advanced technology security systems,” FedEx said in its statement.

One worker was injured after the package – which was destined for Austin – exploded at the facility near San Antonio, on 9935 Doerr Lane, in Schertz, TX, after midnight, police said.

The employee was evaluated and released, according to Michael Carpenter, the mayor of Schertz.

Chief Michael Hansen of the Schertz Police Department said the explosion was called in about 12:25 a.m. Tuesday.

The package was on the automated conveyor and the injured worker was near the package.

No one in the Schertz area was the target, Hansen said.

Police officials have asked the public to be vigilant and report any suspicious packages.

Emergency crews also responded to a call regarding the second package FedEx confirmed Tuesday afternoon. The potentially deadly package was shipped to a FedEx facility near the Austin airport, according to the Austin American-Statesman.

Police dispatched a hazardous materials team to the FedEx ground delivery facility, which is located in the 4100 block of McKinney Falls Parkway in southeast Austin.

“We are working closely with law enforcement in their investigation,” and aren’t releasing any more specific information about the package, said Jim McCluskey, manager of FedEx communications.

The FBI couldn’t confirm reports that the exploded package in Schertz contained metal shrapnel and nails. The FBI, the Bureau of Alcohol, Tobacco, Firearms and Explosives and local authorities are investigating the blast.

An FBI spokesperson said that it’s “more than likely” the explosion is linked to a string of bombings in Austin, TX, which is an hour away from Schertz. A series of four bombings there have killed two and injured four.http://www.pixelcreatif.com/texas-explosions-work-of-serial-bomber/” class=”more-link

“We are clearly dealing with a serial bomber,” Austin Police Chief Brian Manley said on Monday.

Authorities originally believed the attacks there could be racially motivated, but the fourth bomb appeared random, rather than targeted, the AP reported.

The latest Austin bomb, on Sunday, used a trip wire and injured two. Those victims are expected to fully recover.

Police in Sunset Valley, which is southwest of downtown Austin, said on Tuesday that the FBI is looking into a “confirmed link” between the Austin packages and a mail delivery office in Sunset Valley.

Local, state and federal officials are investigating the bombing, with rewards for information rising into six figures.

Copyright 2018 Raycom News Network. All rights reserved.

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American in Custody After Severed Head Is Found in Japan

An American man is in custody in Japan after authorities found a severed head in a suitcase left in a lodging facility.

Japanese investigators said the 26-year-old American was seen on security footage with a 27-year-old woman who went missing, The Japan Times reported. Police were investigating the woman’s disappearance when they came upon what appears to be her missing head, still inside a suitcase in an Osaka lodging facility, they said.

Police believe the American man confined the missing woman in another Osaka location he was using as a location rental, the Times reported. Security footage captured the man and woman entering together, according to the report, but the woman was not seen leaving.

The woman was reported missing by her mother on Feb. 17, after she wrote on Instagram was going to “meet Jay,” which is believed to be a reference to the American man she was seen with, the Times reported.

The man was arrested in Nara Prefecture on Thursday, according to the report.

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Professional soccer players spotted in San Antonio ahead of Mexico vs. Bosnia-Herzegovina match

Soccer players for the Mexico and Bosnia and Herzegovina teams have been practicing in San Antonio and visiting with locals ahead of their match at the Alamodome Wednesday.

The Mexican National Team has been spotted practicing at UTSA and dropping in at the Children’s Rehabilitation Institute of TeletonUSA. Their opponents have been seen around downtown San Antonio.

According to ESPN reporter Tom Marshall, attendance at the Alamodome is expected to reach 30,000 on Wednesday.

The 8 p.m. game is El Tri’s first of 2018 and the kick-off to their 16th annual U.S. Tour. It is part of the journey to the FIFA World Cup in Russia happening this summer, according to event details online.

See what they soccer stars have been up to while in San Antonio in the gallery above.

Madalyn Mendoza is a digital reporter for MySA.com. Read more of her stories here.| mmendoza@mysa.com | Twitter: @MaddySkye

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Devils Center, Hingham Native Brian Boyle Making Special Return To Boston

Bruins Face Off Live: New Jersey Devils And Brian Boyle Back In Boston

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Bruins Face Off Live New Jersey Devils And Brian Boyle Back In Boston

The New Jersey Devils are at TD Garden to face off against the Boston Bruins on Tuesday, and the game means a little something extra for Devils fourth-line center Brian Boyle.

Boyle, who is from Hingham, Mass., is making his first trip back to Boston since he was diagnosed and treated for Leukemia.

For more on Boyle and Tuesday’s matchup, check out the “Bruins Face-Off Live” video above, presented by EchoStor Technologies.

Thumbnail photo via Mark J. Rebilas/USA TODAY Sports Images.

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