Tesla Raises $1.2 billion from Wall Street
Tesla has tapped Wall Street for the much needed cash. They have offered $1.2 billion in shares and convertible debt. It is the second time that Elon Musk and Tesla Inc. have raised such huge capital in 12 months. The Silicon Valley based company offered stock and convertible notes to raise the capital.
Company officials say that they raised almost 20% more than what they had planned to, but the investors were thinking that they would need more. As the launch of Model 3 sedan is coming up. After this raise the stock of Tesla in the afternoon trade was up to $262.42 per share on Nasdaq.
This funds raised by them show the ability of Elon Musk to make Wall Street believe in his vision of Tesla. That one-day they will become the biggest car manufacturer.
Tesla Inc. now plans to spend around 2.5 billion USD in the first-half of 2017, in capital expenditures ahead of the launch of the Model 3 sedan in July, 2017.
Liquidity and cash burn remain key near-term risks, and investors may grow weary of continued raises as this is the second capital raise in a year.
UBS Analyst Colin Langan.
Out of the offering that they put out, $850 million came from the convertible notes due 2022. And the rest $350 million came from the sale of 1.3 million shares at the rate of $262/share.
The company also declared that Elon Musk also bought 95,420 common shares for $25 million in the latest stock offering.