Tesla has filed an underwritten registered public offering of about $2-billion in shares of its common stock to raise money to ramp up Model 3 production.
After receiving a surprising 400,000 or so preorders for the Tesla Model 3, the American automaker is offering about $1.4-billion in shares while CEO Elon Musk will sell the remaining shares to “cover tax obligations associated with his concurrent exercise of more than 5.5 million stock options,” CNBC reports. Tesla will use the capital to help fund Model 3 production, since it intends to deliver the entry-level sedan by the end of next year.
In the first quarter, the automaker delivered 14,820 cars and plans on selling 80,000 to 90,000 this year. Considering it could potentially have 400,000 buyers interested in the Model 3 – not all preorders are expected to become actual sales – the company has a lot to do to increase production. At its most recent shareholder meeting, Tesla said that it has revised its 500,000 unit-per-year target to 2018 instead of 2020.
Musk will also donate 1.2 million shares of his Tesla stock to charity.
Although shares of Tesla were initially down in after-hours trading, it has since gone up over three percent at the time of this article.
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