Tesla Raises $1.2B, More Than Planned Ahead Of Model 3 Launch

Tesla to raise $1.15 billion in series of offerings

Tesla's raising capital is not such a surprise for analysts who had been expecting some kind of similar move for a few months, as the company has been bleeding cash ahead of the much-anticipated Model 3 launch.

Tesla raised about $1.2 billion-about $350 million in common shares and $850 million in convertible debt, according to two Securities and Exchange Commission filings Friday. The underwriters increased the amount of equity and convertible notes to $1.2 billion.

The Palo Alto, Calif. -based manufacturer sold stock at $262 per share, totaling almost $350 million in proceeds, and issued convertible notes worth $850 million, according to a document filed Friday with the Securities and Exchange Commission. Instead of falling, Tesla stock is climbing in premarket trading.

Tesla CEO Elon Musk has attempted to assuage investor fears that the Model 3 will not enter production on schedule.


Despite facing major financial hurdles, and the dilutive nature of stock sales, the triumphant offering confounds Tesla skeptics, who point to the loss-marking company's $42.37 billion market capitalization - greater than that of Nissan Motor Co Ltd, which reported a profit of $4.7 billion previous year. According to a document filed by the company with the Securities and Exchange Commission, the California-based manufacturer sold its stock at $262 per share, raising almost $350 million in proceeds, and another $850 million via convertible debt. Tesla plans to accelerate expansion of the Supercharger network this year, starting with doubling its number of North American Supercharger locations in 2017, the company said in its quarterly earnings shareholder letter in February.

"Liquidity and cash burn remain key near-term risks, and investors may grow tired of continued raises as this is the second capital raise in a year", wrote UBS analyst Colin Langan.

It's important to note that Jason Wheeler, Tesla's departing CFO, later clarified that this capital expenditure is an estimate for the first half of the year, not a full-year estimate.

Several analysts forecasted a capital raise closer to $2.5 billion.

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