Despite a number of challenges mounting for electric carmaker Tesla, CEO Elon Musk has found a powerful supporter in billionaire investor George Soros.
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Soros Management Fund, founded by George Soros, bought $35 million worth of Tesla convertible bonds in the first quarter of 2018, according to 13F documents the firm filed with the Securities and Exchange Commission. Convertible bonds are a type of debt security that can be exchanged for a predetermined amount of company shares. They are usually issued by companies seen as high risk, high reward.
The vote of confidence comes at a time when Tesla has been struggling to ramp up production of its Model 3 sedan, which is seen as a critical bellwether of the company’s near-term profitability. The electric carmaker continues to target a weekly production rate of 5,000 Model 3 sedans by the end of the second quarter, despite starting the quarter at a rate of just 2,000 vehicles.
Last month auto news site Electrek reported that Tesla temporarily suspended Model 3 production for a few days to “do a comprehensive set of upgrades,” which is expected to allow for production to increase to a rate of 2,000 to 4,000 vehicles per week by next month. Musk squashed a report midmonth that he would need to raise more funds in order to meet production goals for the Model 3.
Tesla has also lost a number of high-profile executives in recent months, including two in its energy unit alone.
Meanwhile, at its Fremont, California, plant, Tesla is being probed by the state's Occupational Safety and Health Administration (OSHA), following reports that it failed to disclose serious injuries at the job site. Tesla has denied any wrongdoing.
Musk’s brainchild is also facing public criticism over a number of recent vehicular accidents, including a fatal crash in Switzerland last week.
Tesla stock is down more than 8% so far this year.
Aside from Tesla, Soros’ fund also purchased a substantial number of shares of e-commerce giant Amazon and streaming service Netflix. The billionaire investor exited his entire Amazon position during the last quarter, but snapped up 51,200 shares during the first quarter.
Soros Management Fund added 148,500 Netflix shares.