Tesla is today reporting another stock contribution worth over $2 billion, only half a month after CEO Elon Musk shut down the thought, saying that “it doesn’t make sense.”
That was before Tesla’s stock bounced to over $700 per share.
During Tesla Q4 2019 profit call a month ago, Musk was approached if it would bode well for Tesla to raise some capital with its higher stock cost.
The CEO said: “Well, we’re spending money as quickly as we can spend it sensibly. So if there’s any sensible way to spend money, we’re spending it. There is no artificial hold back on expenditures. Anything that I see that is what looks like it’s got good value for money, the answer is yes immediately. But we’re spending money I think efficiently, and we’re not artificially limiting our progress. And then despite all that we are still generating positive cash. So in light of that, it doesn’t make sense to raise money because we expect to generate cash despite this growth level.”
Be that as it may, only half a month later, Tesla is currently reporting another stock contribution of 2.65 million offers, which would assist Tesla with raising over $2 billion.
In a recording with the SEC, Tesla says that it intends to utilize the continue to “further strengthen our balance sheet” and for “general corporate purposes”: “We intend to use the net proceeds from this common stock offering to further strengthen our balance sheet, as well as for general corporate purposes. Pending use of the proceeds as described above, we intend to invest the proceeds in highly liquid cash equivalents or United States government securities” and “We expect to receive net proceeds from this offering of approximately $2.01 billion (or approximately $2.31 billion if the underwriters exercise their option to purchase additional shares in full) after deducting the underwriting discounts and our estimated offering expenses. The estimated net proceeds are based on the assumed public offering price of $767.29 per share, which was the last reported sale price of our common stock on February 12, 2020.”
Both CEO Elon Musk and board part Larry Ellison said that they intend to purchase shares as a component of the contribution, about $10 million and $1 million worth, separately.