UNITED STATES (OBSERVATORY NEWS) — Tesla announced an additional issue of shares in the amount of about $ 2 billion. The offering price will be about $ 767.29 per share.
Company founder Elon Musk and board member Larry Ellison will take part in the offering: they will buy securities worth $ 10 million and $ 1 million, respectively. The company will offer 2.65 million shares of Tesla through underwriters Goldman Sachs and Morgan Stanley, with an expected revenue from the placement of $ 2.3 billion.
The proceeds from the placement of shares will be used to strengthen the financial balance and corporate needs, the company said.
Wedbush analyst Dan Ives praised the decision, noting in a CNBC comment that Wall Street skeptics will now find it even harder to oppose Tesla. Ives noted that this is a “wise strategic move” that eliminates any dramatic assumptions about Tesla related to a lack of money.
Earlier, Elon Musk repeatedly assured investors that Tesla would not need to raise more funds for expensive initiatives, including the production of a new car model, the expansion of production in China and the construction of the first European plant.
“There is no point in raising money,” Musk said during a telephone conversation on January 29, when an investor asked why Tesla was not using a favorable stock price to speed up production. Musk said the company will generate enough funds on its own to finance ambitious expansion plans.
Musk also said that Tesla needed to produce more batteries to increase the production of electric vehicles, adding that some projects, such as the electric tractor production program, could not be continued without improving the batteries.
“Recent spikes, including delays in deliveries of cars from a new factory in China due to the coronavirus epidemic, the Model X recall likely influenced management’s decision to place new shares,” said Garrett Nelson, CFRA analyst .
Tesla raised about $ 2.3 billion in May to develop new models and build a factory in China. Among the automobile company’s upcoming plans are the Model Y SUV and the Semi commercial truck, whose launch has been delayed due to a lack of battery capacity.
Since its last capital raise, Tesla has built a $ 2 billion factory in Shanghai and introduced the futuristic Cybertruck pickup. The Shanghai factory began supplying cars last month.
Tesla shares on the premarket fell 5.8%, to $ 722.79 per share on the background of news. Since the beginning of the year, Tesla quotes have grown by 131.6%. Over the past 12 months, the company’s capitalization has grown by 19%, while the Standard & Poor’s 500 stock index has grown by 23%.
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