Tesla Selling Shares to Raise $500M
Tesla has filed to sell 2.1 million shares in order to raise about $500 million to expand its business.
If all of the underwriters exercise all of their options to purchase additional shares, Tesla could make as much as $566.5 million off the sale. That money will go towards Tesla expanding its charging network, growing its retail business, building the Gigafactory and development of the Model 3 sedan according to a filing with the Securities and Exchange Commission.
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Elon Musk, Tesla’s CEO and current largest shareholder has already expressed interest in buying as many as 83,974 shares for a price of $20 million. Tesla stock currently sits around $242 a share, after sliding by 15 percent through Wednesday since July 20, the day after Tesla announced “Ludicrous Mode” for its Model S sedan which allows the car to sprint from 0 to 60 mph in just 2.8 seconds.
Elon Musk still plans on having Tesla profitable on a net basis by 2020, with a sales target of 500,000 units a year. Tesla is currently spending a “staggering amount of money on CapEx,” according to Elon Musk. Developing new models and increasing battery production by building a new factory will cost the company billions.
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Stephen covers all of the day-to-day events of the industry as the News Editor at AutoGuide, along with being the AG truck expert. His truck knowledge comes from working long days on the woodlot with pickups and driving straight trucks professionally. When not at his desk, Steve can be found playing his bass or riding his snowmobile or Sea-Doo. Find Stephen on <A title="@Selmer07 on Twitter" href="http://www.twitter.com/selmer07">Twitter</A> and <A title="Stephen on Google+" href="http://plus.google.com/117833131531784822251?rel=author">Google+</A>
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Just 3 days ago; thestreet, reuters, cnbc, nasdaq video, secure marketwatch all said the same thing: Tesla is burning through cash and may seek to raise capital.