Investing

New $2 billion offering eliminates cash worries

0


Wedbush Securities’ Dan Ives praised Tesla’s announcement on Thursday morning of a new $2 billion common stock offering.

“It’s a smart, strategic move,” Ives said on “Squawk Box.” “It takes any doomsday scenario around cash crunch … off the table.”

Shares of Tesla, which have skyrocketed recently, were under some pressure on Thursday after the company said before-the-bell that it’s planning a $2 billion common stock offering. It comes just two weeks after CEO Elon Musk said Tesla would not raise more capital.

Musk is set to buy as much as $10 million of stock in this offering, while Tesla board member Larry Ellison will also purchase up to $1 million. The company will offer 2.65 million Tesla shares through underwriters Goldman Sachs and Morgan Stanley.

Tesla said it plans “to further strengthen its balance sheet” with the offering’s proceeds. “It’s really about the cash crunch. Now they’ve solidified the balance sheet by deliveries going up into the right,” Ives said.

Ives has a baseline price target of $710 per share, and maintains his neutral rating on the stock. He also set a $1,000-per-share bull case on the stock.

Tesla currently has a little more than 180 million shares outstanding.

Shares of Tesla have been on a wild ride in recent sessions.

Especially last week, when the stock jumped nearly 20% on Feb. 3 and increased 13.7% the next day. On Feb. 5, it dropped 17.2%. It’s been bouncing up and down since. In the past six months, Tesla shares have surged about 220%.

Tesla…



Source

Gillibrand unveils another privacy proposal with new agency

Previous article

TripAdvisor is one travel stock to avoid into earnings, chart suggests

Next article

You may also like

Leave a Reply

avatar
  Subscribe  
Notify of

More in Investing