Elon Musk to buy more Tesla stock in upsized capital raise – Fixie News
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Elon Musk to buy more Tesla stock in upsized capital raise

Tesla on Friday was set to raise up to $2.7 billion in a record-setting capital raising for the electric carmaker, as investors scooped up a mix of new stock and convertible notes that will recharge the company’s cash-depleted balance sheet.

The company said in a filing that it had raised its offer to 3.1 million shares, rising to 3.5 million including a tranche for underwriting banks, from an initially planned 2.7 million, priced at $243 per share.

The filing also showed it would place convertible debt worth $1.6 billion, up from an initial planned $1.35 billion.

That all pointed to buoyant interest in the offering and shares in the company rose 1.5 percent in trading before the bell.

Tesla’s launch of a capital raise was greeted with relief by Wall Street on Thursday after a tumultuous year which has seen analysts and investors cast doubt on its ability to produce, sell and deliver enough cars to make a sustainable profit.

The company faces expensive challenges, including launching production in China, overhauling its US retail and service operations and developing new models, including the high-volume Model Y SUV and a Semi commercial truck.

Many analysts had calculated that without new cash Tesla – which burned through $1.5 billion in the first quarter and has seen demand for its cars soften – would not be able to carry out its plans.

Billionaire Musk, whose fortune centers around a 20 percent stake in the $42-billion company, has also doubled his initial commitment for buying shares and will now buy stock worth up to $25 million, the company said.

Tesla had said on Thursday it would raise up to $2.3 billion in new capital through shares and debt. That included an offering of 2.7 billion shares worth around $650 million and $1.35 billion in debt, before issues to underwriters.

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