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Soros Fund Management LLC took a $35 million stake in the
convertible bonds of Tesla, which are due in March 2019
<88160RAB7=>, according to filings with the U.S. Securities and
Exchange Commission. A spokesman for Soros did not respond to a
request for comment.
Convertibles are hybrid securities, either bonds or preferred
stock, that can be exchanged for a predetermined number of
common shares. That effectively lets an investor participate in
stock-price changes, but with the yield and greater security of
a fixed-income instrument.
Musk, who like Soros is also a billionaire, has been under
pressure from investors to prove the company can solve
production problems, stem senior staff departures and resolve
questions about crashes involving its electric cars.
At the end of March, the Tesla bonds came under severe selling
pressure as the luxury automaker faced concerns about its
ability to produce its cheaper Model 3 sedan. A crash involving
Tesla's autopilot technology and concerns about the company's
ability to raise new capital also took a toll.
On Monday, Musk told employees the company was undergoing a
"thorough reorganization."
In 2016, SolarCity Corp, a debt-laden solar panel firm backed by
Musk and now owned by Tesla raised $305 million by selling
future cash flows for a portfolio of solar projects to a fund
advised by Soros Fund Management LLC.
Soros also previously held some Tesla stock, but he sold off his
stake last year.
Quarterly disclosures of hedge fund managers' stock holdings in
13F filings are one of the few public ways of tracking what
managers are selling and buying.
The disclosures come 45 days after the end of each quarter and
may not reflect current positions.
(Reporting by Trevor Hunnicutt; Editing by Jennifer Ablan and
Lisa Shumaker)
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