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Silicon valley billionaire Elon Musk said on Friday his Tesla Inc company will not need to raise any money this year because the electric car maker will have positive cash flow and be profitable in the third and fourth quarter.
Musk was tweeting in response to a story in The Economist, which said the electric carmaker would need $2.5 billion to $3 billion in additional funding this year, citing Wall Street brokerage Jefferies.
"The Economist used to be boring, but smart with a wicked dry wit. Now it's just boring (sigh). Tesla will be profitable & cash flow+ in Q3 & Q4, so obv no need to raise money," Musk tweeted.
Tesla has been burning cash while struggling with the production of its Model 3 sedan, seen by analysts as crucial to the company's long-term profitability. That has led to speculation on Wall Street that the company will need to raise more capital to sustain its operations.
Tesla sought to squash speculation about its capital needs this year in the first week of April, when it announced it built 2,020 of its cheaper Model 3 sedans in the last seven days.
The company said then it was laying the groundwork for Q3 to have the "long-sought ideal combination of high volume, good gross margin and strong positive operating cash flow."