Tesla to sell $5 bln in new shares

Tesla is raising $5 billion worth of new stock to take advantage of skyrocketing prices for its shares.

CNBC’s Michael Wayland reported:

Tesla on Tuesday unveiled a plan to raise $5 billion, its second such move in three months as the electric car maker cashes in on a meteoric rally in its shares this year.

The additional shares will be sold “from time to time” and “at-the-market” prices, Tesla said in a filing with the Securities and Exchange Commission. The filing said banks will sell shares based on directives from Tesla.

With Tesla’s market capitalization at $598 billion, the new offering represents less than 1% of the company’s value.

Tomi Kilgore from MarketWatch wrote:

The stock TSLA, +1.27% had dropped as much as 3.6% to an intraday low of $618.50, before reversing course to edge 0.6% higher to $645.60 in afternoon trading. That pushed the market cap up to $612.0 billion, enough to make Tesla the sixth-most valuable U.S. company.

The stock has now soared 95.5% over the past three months and 671.6% year to date, while the S&P 500 index SPX, +0.28% has gained 14.6% this year.

Wedbush analyst Dan Ives said he believes the capital raise is a “clear positive” for Tesla, and further solidifies his “bull case” stock price target of $1,000 and his “base” target of $560, which is 13.3% below current levels.

Kirsten Korosec in Alex Wilhelm from TechCrunch noted:

Tesla is working with Goldman Sachs, Citigroup, Barclays, BNP Paribas, BofA, Credit Suisse, Deutsche Bank, Morgan Stanley, SG Americas Securities and Wells Fargo, according to a filing Tuesday with the U.S. Securities and Exchange Commission. The same filing notes that Tesla will sell these shares “from time to time” and “at market prices.” Tesla said it will pay the banks a “commission of up to 0.25% of the aggregate gross proceeds” of the shares that they sell, or a maximum of $12.5 million.