Tesla Offers Additional 2.7 Million Shares, Plans to Repay DOE Loan Early
Tesla has announced it will offer 2,703,027 shares of common stock along with $450 million worth of convertible senior notes that mature by 2018. The money raised from this public offering will primarily be used to pay off Tesla’s Department of Energy loan with interest.
Tesla CEO and co-founder Elon Musk will purchase $100 million worth of the shares himself, with $45 million purchased from the common stock offering and $55 million bought directly from Tesla in a private sale. The underwriters will have a 30-day option to purchase up to 405,454 additional shares and $67.5 million worth of convertible notes, which can be converted into cash or shares of Tesla stock when they mature.
Tesla stock ended trading today at $84.84 a share, up significantly from last week’s price in the mid- to high $50 range. The surge in price is attributable to Tesla posting its first quarterly profit, with the company generating $11.2 million net income in the first quarter of 2013.
Though Tesla’s revised financing option may have lead to higher consideration among luxury buyers, the brand is still only selling variations of one vehicle. Whether Tesla can maintain its momentum remains to be seen.