Tesla is selling $2 billion of shares
Tesla will sell $2 billion of its shares, the company said Wednesday.
"Tesla is offering about $1.4 billion of shares with the remaining shares to be sold by Elon Musk to cover tax obligations associated with his concurrent exercise of more than 5.5 million stock options," the automaker said in a statement.
"On a net basis, Mr. Musk will increase his overall Tesla shareholdings through these transactions."
Tesla said that it would use the capital it raises to "accelerate the ramp" of its Model 3 mass-market vehicle.
After Tesla reported first-quarter earnings, Musk said that the company would aggressively ramp up its production and delivery schedule, with 500,000 vehicles to roll off assembly lines in 2018.
That's two years ahead of original 2020 target.
Tesla is also constructing a battery factory in Nevada, to provide the lithium-ion cells it will need to create battery packs for all those cars.
The fundraising confirmed expectations across Wall Street, though the $1.4 billion Tesla is more than some analysts — including Goldman Sachs' Patrick Archambault — had anticipated.
Morgan Stanley and Goldman are leading the underwriting, Tesla said.Screenshot via Google Finance
The shares shares fell about 4% in trading after the markets closed Wednesday, more than wiping out the day's gains.
The Palo Alto-based electric-car maker raised $738 million in August 2015, when shares were valued at $242.
Tesla has repeatedly said that it maintains a comfortable cash position at about $1 billion.
But the company's shares have also recovered from a swoon earlier this year, and while they're still well below a trading peak of over $290 set in 2014, Musk and his team may have looked at the market and decided that this was the best time to fill the war chest.
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