Tesla locks in stock surge with $2B offering at $767 per share

Tesla locks in stock surge with $2B offering at $767 per share

Tesla locks in stock surge with $2B offering at $767 per share

"We have long wanted Tesla to raise a large amount of cash via stock issuance due to its lofty valuation and then perhaps never need to raise capital again".

The automaker surprised Wall Street on Thursday when it announced plans to raise more than $ 2 billion through a common stock offer, despite stating only two weeks ago that it would not seek to raise more cash.

The underwriters of the offering will also have a 30-day option to buy up to approximately $300m of additional common stock.

The stock offering conflicts with statements Musk and CFO Zach Kirkhorn made last month during Tesla's fourth-quarter earnings call.

The sale arrives as almost 50 percent of analysts have a "sell" rating on the stock after a stunning rally has more than doubled Tesla's share price in a little more than a month.

CEO Elon Musk will buy as much as $10 million of the shares and board member Larry Ellison, the founder of software giant Oracle, will take another $1 million of them, according to a regulatory filing.

The recent rise in Tesla shares has helped boost Musk's net worth by about 50 per cent this year to US$40.5 billion, according to the Bloomberg Billionaires Index.

The electric-car maker said it plans to use the proceeds from the offering to strengthen its balance sheet and for general corporate purposes. At that time, Musk said the company was spending money sensibly and that there is no "artificial withholding of expenses".

Its stock has more than tripled since October when the company posted a rare quarterly profit.

Tesla's enterprise value topped that of rivals GM and Ford earlier this year and remained higher than GM's even after Thursday's decline.

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