Tesla needs some fresh cash
Electric Vehicle Company Tesla Motors plans to offer investors 2.1 million. Additional shares, thus will try to provide about 500 million. Dollars, reports Reuters. The company also plans to provide banks underwriters a 30-day option to purchase additional ordinary shares to 75 million. Dollars. Founder and CEO Ellen Musk will buy shares for about 20 million. Dollars, the company said.
What will be used
With funds raised from the secondary public offering the company must fund higher costs associated with new projects, such as Model 3 and battery factory in Nevada, announced by Tesla Motors Inc. This will be the first offering of shares of the company from May 2013 onwards. The company also plans to expand its retail sales and build a network of charging stations. The planned investment in the factory battery is about 5 billion. Dollars.
The largest shareholder in the company – CEO Ellen Musk will buy 84 thousand. Shares, which will pay about 20 mln. Dollars, the company said. Main underwriters of the issue are Goldman, Sachs & Co. and Morgan Stanley, and J.P. Morgan and Deutsche Bank Securities will also participate in the preparation of the secondary offering of securities.
Tesla Motors expects to collect between 492.6 and 566.5 mln. USD by the issue of shares. On Friday, the price of shares of the company rose to 242.51 dollars per share. After the announcement of the loss for the quarter in early August, however, the shares fell nearly 12%.
Sale of shares after losses
Earlier this month the company announced that the sale of all electric loses 4 thousand. Dollars, which for the second quarter have lost 395 mln. Dollars. In June, the company recalled and credit for 750 mln. USD as expectations of management are to turn a profit until 2020
Some time ago Musk was optimistic that other business, Tesla can improve the performance of the company. It starts battery production for domestic solar panels, as expectations of Musk are generating revenues 400-500 million. Dollars next year and “several billion” in 2017
One of the reasons for placing the additional number of shares is precisely the fact that innovative carmaker still not profitable enough and needs a cash injection to continue its development.