Tesla recently announced plans to raise up to $2.7 billion, which will be a record financing record for the electric vehicle manufacturer. As investors buy new stocks and convertible bonds, they inject new vitality into the company's cash-depleted balance sheet.
In a filing with the Securities and Exchange Commission (SEC), Tesla increased the number of public shares to be issued publicly from 2.72 million to 3.09 million, and the issue price was $243 per share. If the underwriters exercised all options, This amount will reach 860 million US dollars.
In addition, the document also shows that Tesla will issue $1.84 billion worth of convertible bonds, up from the original plan of $1.35 billion. Therefore, based on the current issue price and the size of convertible bonds, Tesla is expected to receive up to approximately US$2.7 billion through this hybrid financing program.
Clement Thibault, senior analyst at Investing.com, a global financial markets platform, said: "I am not surprised to see the scale of financing. For Tesla, the more financing, the better."
After a turbulent year, analysts and investors have expressed doubts about Tesla's ability to produce, sell and deliver enough cars to achieve sustainable profits. Therefore, this financing has been welcomed by Wall Street.
Many analysts have predicted that Tesla will need to raise funds for its expansion, including the construction of the Shanghai plant, the comprehensive reform of the US retail and services business, and the launch of new models including ModelY and semi-commercial trucks.
Analysts expect Tesla to be unable to implement its plans without new capital injections. In the first quarter of this year, Tesla consumed $1.5 billion in cash, and demand for Tesla cars has also weakened.
Tesla said that after deducting all costs, it can now get up to $2.7 billion in new capital from the offering. In contrast, the company held a cash reserve of $2.2 billion at the end of March.
In a filing with the Securities and Exchange Commission (SEC), Tesla said that CEO Elon Musk was interested in subscribing to $25 million of the stock, a significant increase from the initial subscription.
NordLB analyst Frank Schwope said: "Muske may increase its stock from $10 million to $25 million, which is in line with the usual marketing plan. Musk always tries to fail to deliver on promises."
Earlier, Tesla had said that it would raise up to $2.3 billion in new capital through stocks and bonds. This includes issuing 2.7 billion shares and $1.35 billion worth of bonds worth about $650 million to underwriters.
After the announcement of the issuance of the hybrid financing plan, Tesla held an investor conference call. At the meeting, Musk said that autonomous driving technology is a fundamental driving force for Tesla and how the company becomes a key company with a market value of $500 billion. This inspires interest in the electric car manufacturer's plan to issue bonds and stocks to raise funds.