Finance - Tesla To Sell More Shares
Two weeks after saying it wouldn't do so, the electric car giant Tesla announced it is planning a US$2 Billion stock offering.
Tesla said it plans to use the proceeds "to further strengthen its balance sheet, as well as for general corporate purposes". The offering boosted Tesla's market capitalization to almost $146 billion, behind only Japan's Toyota Motor Corp. among the world's most valuable auto manufacturers. The market liked the idea, and shares closed up at US$804 at the end of Thursday's trading.
Company chief Elon Musk plans to purchase as much as $10 Million of stock in the offering, while Tesla board member Larry Ellison will purchase up to $1 Million.
Telsa shares keep rising despite some difficulties. The company has about $13 Billion in debt on the books and about $6.9 Billion net of cash on hand. Production in China also was temporarily halted due to the coronavirus, and ramping up output of Model 3s there and Model Ys in California is expected to pinch profit margins. And it is recalling 15,000 Model X SUVs because of problems with the steering assist motor bolts.
And yet - Tesla stock has climbed about 120 percent in the past three months and 225 percent in the past six.