Tesla prices secondary stock offering at discounted $767 a share
Feb. 14, 2020
Tesla’s stock is in Ludicrous Mode — and the company just cashed in.
The electric automaker said Friday it has priced its secondary stock offering at $767 a share — a 4.6-percent discount to its Thursday closing price, but nearly 80 percent higher than it was at the start the year.
The offering aims to raise more $2.3 billion by selling just over 3 million additional shares, despite CEO Elon Musk saying just two weeks ago that such a sale wouldn’t “make sense.”
“We are still generating positive cash,” Musk told analysts on Tesla’s Jan. 29 earnings call. “So in light of that, it doesn’t make sense to raise money because we expect to generate cash despite this growth level.”
The majority of the cash will be raised through the $2 billion public offering, while the sale’s underwriters have a 30-day option to purchase an additional $300 million worth of common stock.
The sale arrives as nearly 50 percent of analysts have a “sell” rating on the stock after a stunning rally has more than doubled Tesla’s share price in a little more than a month.
The run has been fueled in part by Tesla’s stronger-than-expected earnings for the end of 2019 and a profit at the battery factory the company runs with Panasonic.
Tesla shares surged Thursday as Musk pledged to buy up to $10 million in shares from the offering. Larry Ellison, a Tesla board member and the co-founder of software giant Oracle, will also buy as much as $1 million in shares, the automaker said.
The automaker said that it will use the funds it raises to “further strengthen its balance sheet, as well as for general corporate purposes.”
Shares of Tesla were up 0.5 percent Friday morning at $808.03.
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