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Tesla starts second $5 billion share sale in three months

Tesla Inc revealed a $5 billion capital raise on Tuesday, its second such move in three months as the automaker cashes in on the stellar increase in its shares this year.

The company’s shares touched a record high on Monday, pushing the automaker’s market value above $600 billion and further cementing its position as the most valuable automobile company in the world despite production that is a fraction of competing automakers such as Toyota Motor, Volkswagen and General Motors.

Ten major banks, such as Goldman Sachs, Citigroup Global Markets, and Morgan Stanley, will conduct the sale, the automaker said in a filing, giving no timeline for its completion.

Demand for Tesla’s shares has been increased also because of the decision last month to add the company to the S&P 500 index, making it one of the most valuable companies ever to join the main U.S. stock market benchmark.

Some investors and Wall Street analysts believe the company’s stock is in a bubble, and a few have warned against adding it to the S&P 500 at present levels. Analysts’ median price target on the stock stands at $400, $230 short of the present price.

The 670% rally in Tesla’s shares this year has also increased CEO Elon Musk’s net worth from $27 billion to $155 billion, making him the world’s second-richest person.

In September, Tesla said it would raise $5 billion to ease its future debt pressures as the company looks forward to massively expand the production of its present vehicles and build new factories near Berlin, Germany, and Austin, Texas.

The company also has plans to introduce new lines of vehicles, including a semi-truck called the Tesla Semi and its futuristic Cybertruck.

The company’s shares dropped 1.3% to $633.73 in premarket trading.

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