Elon Musk Seeks to Raise $5 Billion By Selling Tesla Stock
To take advantage of the strong demand for electric cars, Elon Musk seeks to raise $ 5 billion in capital through Tesla by conducting a share offering.
It is the second time that the tycoon has put shares of the electric vehicle and solar panel company up for sale in three months. In September, Tesla said it planned to sell up to $ 5 billion in common stock, just one day after its 5-1 split in stocks took effect.
In a regulatory document, Tesla Inc. said Tuesday that the stock sale would be done "from time to time." These will be sold in ten different brokerages and each one will receive a commission of up to 0.25%.
According to Daniel Ives of investment and financial services firm Wedbush, the current move makes sense. In a note to customers, he noted that this responds to the rise in the company's shares and the interest of investors in the electric car market.
This year, Tesla shares rose more than 600% in value, closing Tuesday at $ 649.88, an increase of 8%.
The Palo Alto, California-based firm must finance the new plant it is building in Germany , in addition to the one it plans to build in Austin, Texas. It is also preparing to launch its new truck and tow truck next year.
The company posted a net profit of $ 331 million in the July-September quarter, its fifth consecutive quarter of profitability. To satisfy government pollution and fuel economy regulations, Tesla sold electric car credits to other producers, bringing in $ 397 million in profits.
Once Tesla reports the results for the fourth quarter of this year, in early 2021, it could be known if the company will post its first full year of earnings.
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