Tesla announced earlier this week that it would sell $US500 million worth of stock.
It’s an equity raise that Wall Street had anticipated, but that came sooner than many Tesla watchers expected.
Tesla priced the offering at $US242 per share, and on Friday upped the amount of stock it plans to sell, to 2.69 million shares from 2.1, according to the Wall Street Journal.
Tesla ended the week trading at $US243 per share.
From the WSJ’s Chelsey Dulaney:
The stock sale comes on top of more than $US4 billion Tesla has raised since the beginning of 2013. The auto maker has sold convertible notes and obtained lines of credit during that period to fund its ambitious bid to move from niche luxury-vehicle maker to a sizable force in the car business.
No one should have been surprised by Tesla’s decision to sell stock, and no one should be surprised that it’s now going to sell even more stock.
Elon Musk’s startup electric car maker needs cash. The company has said that it will end the year with $US1 billion in the bank, and it has a $US750 credit line, but it also spent over $US400 million in the second quarter.
It’s a car company, and car companies burn a lot of cash, particularly when they’re launching new vehicles, as Tesla is now with the Model X SUV.