Investing

Tesla offering $2 billion in common stock with Elon Musk buying

0


Tesla shares slid after the electric automaker said it plans a $2 billion common stock offering, just two weeks after CEO Elon Musk said the company would not take advantage of its surging stock to raise more capital.

Musk himself will 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, with gross 

Tesla said it plans to use the proceeds from the offering “to further strengthen its balance sheet, as well as for general corporate purposes.”

Wedbush analyst Dan Ives praised the announcement, telling CNBC’s “Squawk Box” that it will be even more difficult for Wall Street skeptics of Tesla to make their case.

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

Shares of Tesla on Thursday slumped about 3% in premarket trading from its previous close of $767.29. But the stock is still well ahead of where it was as recently as December. Tesla stock has climbed about 120% and 225% in the past three months and six months, respectively. Additionally, at one point earlier in the month Tesla reached as high as $968.99.

Traders had speculated that Tesla may use the recent run-up in the stock as an opportunity to raise funds by selling more shares to the public. The sudden jump in the stock raised concerns it had become a speculative bubble driven…



Source

Mike Bloomberg pays influencers to post memes for 2020 campaign

Previous article

Cisco (CSCO) Q2 earnings

Next article

You may also like

Leave a Reply

avatar
  Subscribe  
Notify of

More in Investing