Published: Fri, February 14, 2020
Markets | By Otis Pena

Tesla plans $2 billion offering amid stock boom

Tesla plans $2 billion offering amid stock boom

Co-founder and CEO Elon Musk will add to his Tesla stake by buying up to $10 million in shares from the offering, for which Goldman Sachs and Morgan Stanley will serve as the lead joint book-running managers, Tesla said in a news release.

Tesla officials have maintained for some time that they have no plans to raise any new funds, including through a new stock sale. At Tuesday's closing price of $767.29 per share, the offering is valued at $2.03 billion.

If the offering is completed, the number of Tesla shares outstanding will total 183.71 million (or 184.11 million if the underwriters exercise their optional shares) valuing the company at almost $141 billion.

Electric auto maker Tesla has announced plans to offer around $2bn of common stock. Last month Mr Musk said the company expected to make its own money from now on and had been spending "sensibly". Especially for a company that doesn't pay a dividend.

In one complaint, a driver said a 2015 Tesla Model S 85D in California was closed and locked when he claimed 'a few moments later the vehicle started accelerating forward towards the street and crashed into a parked auto'. Additionally, the company is in the process of building a new Gigafactory in Germany, outside of Berlin.

It is an interesting development however, as so far the Shanghai Gigafactory is only producing one vehicle - the Standard Range Plus "Made in China" Model 3 - of which it had already made 2,635 vehicles in just a few weeks since production began. He noted that production of the semi truck and Cybertruck will be limited until the production levels can be increased because of those two require significantly more battery cells than the other vehicles.

The 15th United States case of coronavirus is an evacuee in Texas
The three patients who remain under the university's care are said to be doing well; others have been returned to quarantine. Of the total confirmed cases, mainland China accounts for 59,539, while 1,361 of deaths are also on mainland China.

The decision to raise money will come as a shock to some investors following Musk's previous comments, Wedbush analyst Daniel Ives said in a note.

Tesla, whose outstanding debt was $13.42bn at the end of 2019, posted its second quarterly profit in a row in January and said it would comfortably make more than half a million cars this year.

The company said it plans to use proceeds from the offering to strengthen its balance sheet and for general corporate purposes.

The recall applies to 2016 model year X vehicles. The current iteration can travel about 250 miles on a single charge.

Tesla is recalling 15,000 Model X SUVs after discovering that corrosion from road salt endangers the critical power-steering mechanism.

According to the company, the concerns are that aluminium bolts between the electric power steering gear assist motor and the gear housing could corrode and break, resulting in a loss of power steering assist.

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