Tesla eyes $5 billion from new stock sales

Tesla plans to sell up to $5 billion worth of its new, split stock in several offerings.

Dave Sebastian reported the news for the Wall Street Journal:

Tesla Inc. TSLA -4.67% said it planned to raise up to $5 billion through stock offerings from time to time as the electric-vehicle maker, which has enjoyed a surging share price, makes another investment push.

The return to capital markets comes after the stock split 5-for-1 on Monday, sending it up sharply. The planned fundraising represents roughly 1.1% of Tesla’s $464 billion market capitalization, according to FactSet.

CNBC’s Pippa Stevens wrote:

“We intend to use the net proceeds, if any, from this offering to further strengthen our balance sheet, as well as for general corporate purposes,” Tesla said. 

The stock briefly traded in the green on Tuesday, but moved lower throughout afternoon trading and ended the session 4.67% lower.

The decline hardly dents shares’ rapid appreciation this year. Through Monday’s close, the electric car maker has gained nearly 500% in 2020. In the last year, shares have gained 1,004% compared with the S&P 500′s 20% rise.

CNN’s Paul R. La Monica noted:

Shares of Tesla surged nearly 13% Monday but fell more than 1% Tuesday to around $490 a share. Still, the recent stock rise has made CEO Musk the third-richest person in the world, according to Bloomberg.

At its current price, Tesla is now worth about $460 billion — more than all but seven companies in the blue chip S&P 500 index. Tesla is still not in the S&P 500 since it has lacked consistent profitability in the past, but that may soon change now that it has a recent track record of generating actual earnings.