Tesla Inc said on Friday it had raised about $1.2-billion, roughly 20 per cent more than it had planned, by selling common shares and convertible debt, ahead of the launch of the crucial Model 3 sedan.
The press release continues: "The aggregate gross proceeds of the offerings, including the options granted to the underwriters, is expected to be approximately $1.15 billion".
Alongside the offering of the common shares, Tesla is also offering convertible senior notes due in 2022, to raise $850 million, a separate filing said. Instead of falling, Tesla stock is climbing in premarket trading.
Elon Musk, CEO and CTO of SpaceX, CEO and product architect of Tesla Motors, and chairman of SolarCity, attends the Allen & Company Sun Valley Conference on July 7, 2015 in Sun Valley, Idaho.More news: Rachel Maddow's Trump tax show dominates cable ratings
Tesla said Musk, already the company's top shareholder with a stake of about 21 per cent as of December, bought 95,420 common shares for $25-million in the latest stock sale. In a note to investors, Colin said that the Palo Alto Company could opt to raise more funds if production and delivery of Model 3 is delayed.
No matter how one chooses to view the convertible offering, the fact that Tesla is still (second time in a year) able to tap into the debt/quity markets is testament to how far ahead of the competition Tesla really is.
Tesla Inc.is about to start production of its upcoming Model 3 later this year, but a lot of analysts believe that building the auto will come at a massive cost for the company. According to a document filed by the company with the Securities and Exchange Commission, the California-based manufacturer sold its stock at $262 per share, raising almost $350 million in proceeds, and another $850 million via convertible debt.
Tesla burned through $970 million in the fourth quarter and expects as much as $2.5 billion in expenditures during the first half of 2017.