Market Overview

Tesla Raises Offering Size, Musk Doubles His Purchase

Tesla Raises Offering Size, Musk Doubles His Purchase

One day after reporting new bond and stock offerings, Tesla Inc (NASDAQ: TSLA) widened the entry point.

What Happened

Management said Friday it will expand its 2.72 million-share offering to 3.1 million shares, and CEO Elon Musk could buy up to $25 million worth of shares — more than double his earlier interest in just $10 million.

Tesla will also increase its debt offering from $1.35 billion to $1.6 billion in convertible notes.

Why It’s Important

Thursday’s announcement had prompted a 4.3-percent pop in share price. Tesla’s offering expansion may an attempt to capitalize on the positive sentiment.

Earlier in the week, management had abandoned its claims of not needing capital and begun hinting at a potential raise. On Monday, a 10-Q filing citing the halt of SolarCity investments portended these developments.

Analysts had long forecasted raises. Morgan Stanley predicted a $2.5-billion offering in the third quarter.

What’s Next

Tesla has formally warned that more offerings may be coming.

“As always, we continually evaluate our capital expenditure needs and may decide it is best to raise additional capital to fund the rapid growth of our business,” according to the company's 10-Q filed Monday.

Tesla's stock traded higher by 1.6 percent to $248 per share Friday morning.

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