Tesla plots US$2 billion offering as Musk seizes on stock surge

Tesla Recalls Thousands of Vehicles Over Power Steering Issue

Tesla RECALLS 15,000 Model X SUVs after discovering road salt damages parts affecting power steering

The regulator has only recently closed investigations over chief executive Elon Musk's 2018 tweets stating that he planned to take his company private, and over projections for Model 3 production rates in 2017.

"It doesn't make sense to raise money", Musk said during a January 29 earnings call when an investor asked why Tesla does not take advantage of its favourable share price to accelerate production. "Diluting the company to pay down debt doesn't sound like a wise move".

While Tesla stock dipped on Thursday as investors anticipated the new shares would drive down prices, they are still up 83 percent so far this year after a string of positive developments, including higher price targets from Wall Street analysts and Panasonic's announcement that its battery partnership with the company posted its first quarterly profit.

Larry Ellison, a Tesla board member and the co-founder of software giant Oracle, will buy as much as $1 million in shares, the automaker said. Its market capitalisation is now worth more than the value of General Motors Co and Ford Motor Co combined.

Proceeds from the new shares, which may be as many as 3 million if underwriters take advantage of their option to purchase additional stock, will be used to shore up the Palo Alto, Calif. -based company's balance sheet.

"Despite Musk's bravado about Tesla's finances, the company needs billions of dollars to finance growth", said Erik Gordon, a professor at the University of Michigan's Ross School of Business.

The electric auto maker said it plans to use the proceeds from the offering to strengthen its balance sheet and for general corporate purposes.

"He is smart to grab cash by selling stock at a sky-high price he might not see six months from now".

The electric vehicle maker restarted production in Shanghai on Monday after the government ended an extended holiday that had been put in place due to the new coronavirus outbreak.

Latest News