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If Elon Musk has a Bloomberg terminal in his makeshift office on Tesla's (TSLA) production floor, he would be wise to do a quick search to see how the company's junk bonds are currently trading. 

At 88 cents on the dollar, Tesla's 5.3% notes due 2025 are hovering around the all-time lows hit in late May. The bonds rallied a bit in June to more than 91 cents on the dollar coming off Musk's upbeat annual shareholder meeting. But the notes have since pulled back amid lingering questions on Model 3 production targets and ongoing bizarre behavior by Musk on Twitter. 

Tesla issued the $1.8 billion tranche of junk debt in Aug. 2017 at par to help fund its operations. The bonds have lost about 10% of their value since then, according to S&P Global Market Intelligence

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The downtrend in the bonds should be carefully watched by holders of Tesla's stock (which like the debt, continues to dive). The ongoing slide lower in the price of the bonds suggests investors are losing confidence in Tesla's ability to be a viable company long-term. That concern runs the risk of raising the cost of Tesla's next capital raise, a maneuver that Musk has stated emphatically the electric car maker won't need this year.

"My gut instinct is that after the last conference call, Musk's increasingly erratic behavior has shaken the confidence of analysts at big firms like Fidelity that sort of make the recommendation to put more capital into Tesla," former hedge fund manager and Tesla expert Whitney Tilson told TheStreet. Tilson says Tesla will need to raise a lot of capital but may have problems doing so. 

"It looks more like they will have to do a distressed financing that could really whack the stock and then you start getting into something that looks like Valeant, which is a lot of debt and shaken confidence in the market where the declining stock price becomes a self-fulfilling prophecy."

A Tesla spokesman didn't immediately return a request for comment on the trading activity of the bonds.

Read more on Tesla's future from TheStreet here.