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That capped a week in which one Wall Street analyst put forth a worst-case scenario in which Tesla’s stock (ticker: TSLA) could plunge to $10, while another was more circumspect and suggested the downside was only to $35. Of course, Musk famously tweeted last summer he was exploring taking the company private at the smokin’ price of $420. That would have been a case of buying high (read that as you will) because Tesla ended up selling stock much lower—at $243 a share—earlier this month, which is still a damned sight higher than Thursday’s close of $195.49.

Jack Hough, who’s trying to make minivans seem almost as cool as Dollar Bill in a recent episode of Billions, details in the Streetwise column all the hurdles Tesla faces in the burgeoning electric-vehicle market. As for me, a preference for German cars is in my DNA, and I’m watching with interest the new EVs from Audi and Porsche’s eagerly awaited offering due next year. There also are models from Jaguar and Volvo that will signal you’re truly woke in your vehicle purchase.

Of course, their EVs aren’t nearly as environmentally friendly as most think, unless you’re like my fanatical neighbor who charges his two Teslas from his solar panels instead of fossil-fuel generated electricity from the grid like nearly all other electric-auto owners.

The market will let genius entrepreneurs report losses, as Amazon.com (AMZN) proved. Tesla’s real challenge is its balance sheet and its rapid-rate burning of cash. As has been reported, Musk told employees the $2.7 billion in recently raised capital would tide Tesla for only 10 months, necessitating further cost-cutting.

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The impact is starkly evident in Tesla’s debt securities, whose price declines have been less precipitous than that of its common stock but dramatic nonetheless.

By last Thursday, Tesla’s 5.30% notes due Aug. 15, 2025, had slumped to a price of 81.35, where they yielded 9.33%, or a huge 7.20 percentage points over the comparable risk-free Treasury security. The company originally sold $1.8 billion of the issue in August 2017 at 100, which provided less than half of the yield premium to compensate for their risk, some 3.20 percentage points. The securities carry credit ratings of Caa1 by Moody’s Investors Service and B-minus by Standard & Poor’s, both down toward the nether reaches of junk land.

Tesla’s recently issued 2% convertible securities due May 15, 2024, had slumped to a price of 88.50 Thursday, down from 100 at their issuance just three weeks earlier. By comparison, the common stock is down 19.6% since the concurrent offering of 3.1 million shares. At the converts’ recent price, they yield 4.62% to maturity, a spread of 2.50 percentage points above Treasuries. Viewed as a long-term call option on the common stock, the convertibles traded at a 40% premium to the bonds’ conversion value, up from 27.4% at the time of the issue’s pricing.

A MarketWatch column this past week suggested Tesla’s debt securities may be a better play for bulls who think the EV maker will survive. That 9%-plus yield to maturity on the 2025 bonds assumes Tesla will continue to pay the interest coupons and will pay off the debt on time, as promised, at face value, plus a 14% capital gain from the current discounted price in addition to the current yield of almost 6%.

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But Mr. Market doesn’t pay 9% for nothing these days when comparable maturity Treasuries yield a bit over 2%. Tesla faces the aforementioned competition from established European luxury marques as well from General Motors ’ (GM) Bolt EV. Trade tensions with China also could stifle Tesla’s growth there. Consumer Reports this past week reported the Autopilot feature on the Model 3 would change lanes erratically, likening it to “monitoring a kid behind the wheel for the very first time” and making it less convenient than driving using the senses provided by your creator.

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Bulls undeterred by Tesla’s financial and technical hurdles and still wanting to speculate in the company’s debt securities could consider hedging the position with the bearish put-spread strategy suggested by Steve Sears in this week’s Striking Price column. The put strategy would cover the perilous period immediately ahead for Tesla, and could be profitable over that span if the stock sinks further. Presumably the gains in the options play would more than offset the likely decline in the bonds in that scenario. If the superbulls prevail, the loss on the put spread would be limited to the outlay for the trade, while the bonds should rally, albeit less than the common stock.

For many reasons, Elon Musk has been compared with Steve Jobs, another brilliant but arrogant innovator who pushed his company into making products that changed the way we live. There is one big difference. Jobs insisted on hoarding the cash Apple’s (AAPL) wildly popular products produced. The company resumed paying a dividend and began buying back stock in 2012, after Jobs died the year before.

This primitive financial strategy provided Jobs with F.U. money (that’s an advanced CFA term) to follow his vision. Musk, by contrast, has been constantly in need of outside financing to fulfill his ambitious plans, which, along with his mercurial personality, keeps his company constantly on the edge. Now is the time that will tell if he can pull it off.

Write to Randall W. Forsyth at randall.forsyth@barrons.com