Electric car maker Tesla’s stock dropped over 4% in morning trading on Thursday as a cash crunch nears and more details about the company’s controversial merger with SolarCity have emerged.
At the same time, SolarCity’s stock dropped over 9% in morning trading. The Nasdaq composite was up 0.26% in morning trading.
Tesla’s ability to maintain its stock is particularly important right now as the company revealed this week that it plans to raise more money this year—either through a debt or equity offering—partly to help fund the acquisition.
The company has to pay $422 million to bondholders in the third quarter of this year while it also invests heavily in its massive battery factory, under construction outside of Reno, Nevada.
For more on Tesla’s Gigafactory, watch:
Tesla (TSLA) is also spending aggressively on getting its planned low cost car the Model 3 to market by the end of 2017. The company says it wants to make 500,000 cars in total by 2018, up from around the 50,000 cars it shipped in 2015.
It’s an audacious—if not unrealistic—goal to be sure. But Tesla’s CEO Elon Musk has long set aggressive goals as markers for his employees to try to hit.
For more, read: 5 Things We Just Learned About the Tesla-SolarCity Deal
Tesla’s planned acquisition of sister company SolarCity, first revealed in June, will only add to a combined company’s cash crunch. The solar company’s cash dropped to $146 million on June 30, from $421 million in the prior year, and the company has a $250 million term loan and $55 million in bonds due by the end of the year.
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Tesla’s stock dropped to a day low of $200.51 per share on Thursday morning and recovered slightly by 1:30PM eastern time to $202.51. That stock price is hovering near the low that Tesla faced the day after it first announced its plan to buy SolarCity.
