Tesla plans to offer $ 2 billion of common stock17. February 2020
Tesla plans to offer $ 2 billion of common stock
New York, February 17, 2020
An announcement comes just two weeks after CEO Elon Musk said the electric car maker won’t use its rising share price to raise more capital.
Tesla shares fell 6% after the announcement in premarket trading. After analysts and investors approved the move because they can support the balance sheet and push ahead with expansion plans. The share closed at $ 804.00 a share after hitting a high of $ 818 in intraday trading.
Musk plans to buy shares for up to $ 10 million, and board member Larry Ellison signaled that he would invest up to $ 1 million. The company will offer 2.65 million Tesla shares through subscribers Goldman Sachs and Morgan Stanley, with expected gross proceeds of $ 2.3 billion before haircuts and expenses.
Wedbush analyst Dan Ives praised the announcement and told CNBC’s Squawk Box that Tesla’s Wall Street skeptics will find it even more difficult to defend their case. “It’s a smart, strategic move,” said Ives.
The company will have to bear a number of high costs in the coming year, such as new factories in Shanghai and Berlin as well as high investments in self-propelled and battery technologies.