Tesla’s second stock offering netted the automaker $738 million in cash for its Gigafactory, Model 3 development, and dealer and service upgrades, Bloomberg is reporting.
Banks exercised their options to buy more stock than the initial $500 million estimate, with underwriters Morgan Stanley and Goldman Sachs buying more than 2 million of the available 3.1 million shares. Tesla CEO Elon Musk said he would be interested in buying $20 million worth of shares in the offering.
(Before the stock offering, the banking arms of Morgan Stanley and Goldman Sachs loaned Musk a combined $475 million, to which Musk pays market rate and is separate from their investment divisions, according to the offering.)
Shares of Tesla were down more than 3 percent in Thursday trading to $245. (Read More…)
Tesla filed Thursday to sell nearly $500 million in shares of its company to raise capital and cover investments the electric carmaker plans to make in the future.
According to the filing with the U.S. Securities and Exchange Commission, the proceeds will go toward the company’s planned investments in the Model 3, Supercharger network and its Gigafactory battery plant in Nevada.
By the book, the stock sale is a short-term pain for long-term gain. Exposing Tesla further to the market carries certain risk, especially considering Tesla’s price growth and relative upside-down balance sheet, but if historical stock prices are any indication, it’ll be a cash cow. Elon Musk asking to buy $20 million in his own stock has pumped up the prices too beyond any distillation worries.
But don’t be mistaken: the second stock sale isn’t really about the cars.
After Tesla Motors announced last week that it had lost $184 million in the second quarter of this year on lower vehicle deliveries and higher spending on its factory ahead of a new model, analysts say the company could have a bumpier road ahead if it can’t raise cash soon.
According to a Reuters report, Tesla is losing $4,000 on each car it sells, and the company’s ability to raise capital could be severely hampered by its spending now and its inability to create positive cash flow in a luxury market that is extremely favorable.
“A capital raise, given the way they’re burning cash today, given the fact that they have future investment needs, seems very likely at some point,” UBS Securities analyst Colin Langan told Reuters.
Yesterday, we reported that in a sales call, Tesla Motors CEO Elon Musk announced a referral program that could, possibly, maybe net one free Model X for someone who referred 10 new buyers.
The qualifications for getting the free car: Refer 10 buyers by Oct. 31 and be the first in your “region” to do so.
Turns out “region” doesn’t mean what we think it does.
How many Tesla owners have paid a visit to the automaker’s sole battery-swap station in the world? Not enough to keep the experiment going.
Aiming to build confidence among Chinese consumers, Tesla CEO Elon Musk has pledged his company will begin local production in China within three years.
Thursday was a gift from the blogger gods for anyone slaving away at $25/post plus traffic-related bonuses. Rather than having to cook up clickbait headlines on Tesla, the equity research arm of Morgan Stanley did it for them.
In honor of Elon Musk’s latest pronouncements, here’s a little thought exercise for hump day. I want you to make the case for Tesla, as a company.
His hand may be on a steering wheel now, but Tesla CEO Elon Musk foresees a future where autonomous vehicles lead to a total ban on human intervention.
Tesla’s Apple aspirations may have its detractors, but the automaker’s ongoing problems in China are likely to do more harm than said detractors.