Tesla's worth rests almost entirely on a long-term bet that it sparks a transformation of the global vehicle industry (and energy in general) and emerges at the top of the resulting pecking order. This is ambitious. If it pulls it off, shareholders stand to reap the rewards. If not, they'll reap something decidedly unrewarding.
Now consider the buyer of Tesla's newly minted bond. If Tesla succeeds, then the bondholder gets a coupon currently worth about 3 percentage points over Treasurys and their principal back, maybe with a premium if called early. If Tesla doesn't, then they also stand to lose potentially all or part of their principal, especially as the bond's relatively loose covenants provide room for Tesla to raise more debt.
Which makes that 5.25 percent coupon a coup for Tesla:
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