Musk Seeks More Money
Hot on the heels of yesterday’s Tesla cash-raising bonanza, the electric automaker is looking to boost the size of its stack once again.
After Thursday’s shelf offering of stock and convertible notes, Tesla announced Friday it wants to boost its injection of capital from $2.3 billion to $2.7 billion, issuing further common stock and debt. CEO Elon Musk now says he’ll buy $25 million of the new stock, up from $10 million yesterday.
As Tesla embarks on an expansion of its manufacturing footprint and model lineup, its first-quarter earnings report revealed cash reserves of $2.2 billion — its smallest pile in years. The company ate up $1.5 billion of its available cash in Q1, Reuters reports, leaving insufficient funds to back its promises. Investor confidence suffered.
Yesterday’s sale involved “$650 million of common stock and $1,350 million aggregate principal amount of convertible senior notes due in 2024 in concurrent underwritten registered public offerings,” Tesla said.
In a new set of filings, Tesla upped its offerings.
The company said in a filing that it had raised its offer to 3.1 million shares, rising to 3.5 million including a tranche for underwriting banks, from an initially planned 2.7 million, priced at $243 per share.
The filing also showed it would place convertible debt worth $1.6 billion, up from an initial planned $1.35 billion.
The supersized offering now amounts to $860 million in new shares and $1.84 billion in debt. Currently, Tesla’s Model Y crossover is due for a late 2020 release, though the automaker still hasn’t confirmed where the new model will see assembly. Overseas, the automaker’s Chinese Gigafactory is under construction in Shanghai.
Looking further into the future, a resurrected Tesla Roadster, pickup truck, and semi trailer await further development and eventual production.
Tesla’s cash hunt agreed with investors, with the company’s stock rising nearly 8 percent in Friday morning trading.
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