The Palo Alto powerhouse announced offerings of 2,703,027 shares of common stock.
Heard the latest of Tesla’s daily news bombshells? The Palo Alto powerhouse announced offerings of 2,703,027 shares of common stock and $450 million of convertible senior notes – and that’s not all! Tesla has granted the underwriters a 30-day option to purchase up to an additional 405,454 shares of common stock and $67.5 million in notes.
Wow! That’s really cool…uh, what’s that mean? Well, it means that the company is taking advantage of its vastly improved financial position (thanks to the recent rocket-like rise in its stock price) to raise even more capital. Instead of taking a breather and prudently retrenching, it’s flooring the pedal and boldly going full speed ahead.
Captain Elon Musk intends to purchase another $100 million worth of shares for himself, a further assurance that his marketing genius and superstar entrepreneur status, which some have called the company’s greatest assets, are all in for the long haul.
The proceeds from the new offerings are expected to be about $830 million, which Tesla intends to use to prepay Tesla’s outstanding DOE loan, and for “general corporate purposes,” which are likely to include production of Tesla’s gull-winged Model X crossover, and perhaps development of a third-generation, mid-priced model.
The latest spate of good news has caused many in the media to turn from skeptics to enthusiasts faster than a Model S ever made a 180-degree turn.