To-the-point: Tesla raising United States dollars 1.15bn in stock, notes offerings

Posted March 18, 2017

Tesla had been expected to raise capital since late past year, with the expectations gaining steam last month after Musk said the company could be "close to the edge" on cash needs.

Tesla TSLA, +0.66% said it sold 1.3 million shares at $262 to raise $250 million, and $850 million through the notes, due in 2022.

Tesla's stock was up slightly to $262.42 in afternoon trade on the Nasdaq. With that into consideration, the additional funding of up to $1.15 billion will definitely provide the company with an extra safety net as the mass production of the Model 3 begins this July.

The future of Tesla's profitability will be dictated by the commercial success of the Model 3, which makes the most affordable auto ever offered by this brand its most important product in years.

Denning was quick to point out that Tesla's former CFO Jason Wheeler said $1 billion of liquidity represents a "nice comfort level" for the company.

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The new offering will be participated by Tesla founder and CEO Elon Musk himself.

Widely recognized for its efforts to execute a smooth transition into a clean energy company, Tesla is reportedly turning to investors for fresh capital.

Tesla said Musk, already the company's top shareholder with a stake of about 21 per cent as of December, bought 95,420 common shares for $25-million in the latest stock sale.

Tesla said it aimed to deliver a combined total of 47,000 to 50,000 Model S and Model Xs in the first half of this year, but did not give a figure for Model 3 target sales. The last time the company raised cash via stock offering was in May 2016, when it sold $1.4 billion worth of shares in a bid to expand its production capacity.

Some Wall Street analysts had predicted that Tesla would seek to raise as much as $2.5 billion in capital.