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

Elon Musk, the CEO of Tesla, previously stated that things would be "close to the edge" when liquidities are concerned, but this announcement should let everyone know that the brand from Silicon Valley is on track even from the financial point of view of the Model 3 launch.

Tesla has announced plans for another public stock offering in which it hopes to raise about £1.15bn to strengthen its balance sheet as it ramps up production of its Model 3 electric vehicle. Both the underwritten public offerings collectively amount to a net sum of $1 billion.

It sold $850 million worth of convertible senior notes, or debt, which is due 2022.

Tesla's shares were up 0.3 per cent at $262.71 in premarket trading on Friday.




"Liquidity and cash burn remain key near-term risks, and investors may grow tired of continued raises as this is the second capital raise in a year", wrote UBS analyst Colin Langan.

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. According to a document filed by the company with the Securities and Exchange Commission, the California-based manufacturer sold its stock at $262 per share, raising almost $350 million in proceeds, and another $850 million via convertible debt. Meanwhile, Tesla started 2017 with $3.4 billion of cash and $900 million of incremental liquidity from financing lines coming from the SolarCity acquisition.

Tesla Inc.is about to start production of its upcoming Model 3 later this year, but a lot of analysts believe that building the vehicle will come at a massive cost for the company. The company had announced its intentions to raise around $1.15 billion as a way to help reduce any risk that could follow its aggressive expansion scheme with regards to the Model 3.

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