Economy

Its stock going gangbusters, Tesla plans $2bn share sale

Its stock going gangbusters, Tesla plans $2bn share sale”

We expect to receive net proceeds from this offering of approximately $2.01 billion (or approximately $2.31 billion if the underwriters exercise their option to purchase additional shares in full) after deducting the underwriting discounts and our estimated offering expenses.

The EV maker's stock price has increased dramatically - by triple - in the last four months, presenting an opportunity too grand to ignore. Its profit and revenue in the last three months of 2019 topped estimates and the company said 2020 deliveries should comfortably beat projections amid demand from new customers.

Tesla Inc made an about-turn on Thursday by announcing plans to raise $2bn in a stock offering as the electric vehicle maker taps into an astronomical jump in its share price in the past few months.

CEO Elon Musk will buy as much as $10 million of the shares and board member Larry Ellison, the founder of software giant Oracle, will take another $1 million of them, according to a regulatory filing.

Tesla raised about $2.3bn in May to start production in China and spend on developing new models, including the high-volume Model Y SUV and a Semi commercial truck, whose launch has been delayed due to a lack of battery production capacity.

Californian vehicle maker Tesla is going to restart production of the previously discontinued Long Range, rear wheel drive Model 3 - but this time, at its Shanghai Gigafactory 3 in China.

As of Tuesday's close, the company's market value stood at $139.6 billion, making it the second most valuable automaker in the world behind Toyota. Additionally, the company is in the process of building a new Gigafactory in Germany, outside of Berlin.

"Despite this comment, we believe this is the correct thing for TSLA to do taking advantage of the recent surge in the stock price". Analysts said the funding will shore up Tesla's balance sheet, eventually helping long-term investors who are betting on the company's success. Tesla reported US$1.33 billion of expenditures for all of past year, well below its initial plan for as much as US$2.5 billion.

Tesla Inc is seeking approval from Chinese regulators to offer a new China-made Model 3 variant, a government document shows. The aluminum bolts that attach the electric power steering gear assist motor to the gear housing may corrode and break causing a reduction or complete loss of power steering assist.



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