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Tesla prepares for Model 3, will raise $1.15B in stock offering, Musk to buy $25M

Tesla Founder and CEO Elon Musk announced in the press release that he was purchasing $25M of the common stock being offered. In the past Musk has participated in stock offerings, buying $100M worth of stock in February 2016. Additionally, Musk purchased $20M in an Offering in August 2015. Musk stated on the Q4 2016 earnings call that he is committed to staying at the company “forever”.



The company is preparing for the fastest growth period it has experienced as they prepare to launch the Model 3. The Model 3 went into a short test production run in February, and on track for productuon start in July. The company is expected to unveil the final version of the car in June as the company wraps up it’s “Project Loveday’ commercial contest. Musk had previously hinted at a possible capital raise as the company de-risks the launch of the Model 3 and the costs associated with a rapid mass-production ramp-up.

Outspoken Tesla bear Mark Spiegel tweeted after the announcement, “Does anyone really think that another $750M of debt on TSLA ‘s balance sheet is preferable to a straight stock sale up here? Amazing!” Spiegel has in the past accused Tesla of fluffing their financial statements and not telling investors the entire story. Another outspoken bear on Tesla is Goldman Sachs, who downgraded the stock last month to a “sell”. Goldman is now one of the lead underwriters of the offering, and has an option to purchase stock in the deal.

Tesla stock is up over 2% in after hours trading following the announcement.

The post Tesla prepares for Model 3, will raise $1.15B in stock offering, Musk to buy $25M appeared first on TESLARATI.com.



This post first appeared on Teslarati.com, please read the originial post: here

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Tesla prepares for Model 3, will raise $1.15B in stock offering, Musk to buy $25M

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