Tesla is raising $2 billion in fresh funding - 15 days after Elon Musk said the company didn't need to
Alex Wong/Getty Images
- Tesla is seeking to raise up to $2 billion in fresh funding through a new stock offering, it said Thursday.
- The new prospectus comes two weeks after CEO Elon Musk said it "doesn't make sense" to raise new money in Tesla's current condition.
- Musk will buy up to $10 million of the new shares, with board member Larry Ellison buying $1 million.
- Visit Business Insider's homepage for more stories.
Tesla said on Thursday it plans to raise $2 billion by selling shares through a public offering, just two weeks after Chief Executive Officer Elon Musk said the company wasn't looking to raise fresh funding.Musk will buy up to $10 million in shares from the new offering, while board member and Oracle co-founder Larry Ellison will purchase $1 million worth Tesla shares. The underwriters will get an option to buy up to $300 million in additional shares.
"We're actually spending money as quickly as we can spend it sensibly," he said in response to an investor question."So if there's any sensible way to spend money, we are spending it. There is no artificial holdback on expenditures. Anything that I see that is -- looks like it's got good value for money, the answer is yes, immediately. So we're spending money, I think, efficiently and we're not artificially limiting our progress. And then despite all that, we are still generating positive cash. So in light of that, it doesn't make sense to raise money because we expect to generate cash despite this growth level." (Emphasis ours.)
The electric-car maker said it plans to use the proceeds from the offering to strengthen its balance sheet and for general corporate purposes.Goldman Sachs and Morgan Stanley are the lead joint book-running managers. Barclays, BofA Securities, Citigroup, Credit Suisse, Deutsche Bank Securities and Wells Fargo Securities are the additional book-running managers. Societe Generale is the acting co-manager.Shares of the company fell about 4% in early trading following the offering's announcement. Tesla on Thursday morning also filed its annual report for 2019.
(Reporting by Supantha Mukherjee in Bengaluru; Editing by Saumyadeb Chakrabarty)
- OYO’s ‘Hockey’ print campaign is winning the internet; there’s a lot more in store, says its head of global brand Mayur Hola
- 77 cases of Indian COVID-19 variant found in the UK
- Karnataka CM Yediyurappa and MP from Punjab Harshmit Kaur Badal test COVID-19 positive
- Pakistan temporarily shuts down social media amid anti-France protests
- Four charts show how COVID-19 vaccines are being distributed in India