A week after posting a huge first quarter loss and saying the company needs to raise cash, Tesla is doing just that. CEO Elon Musk will buy $10 million worth of stock in a $1.5 billion offering of shares and convertible notes.
Tesla Chief Executive Elon Musk speaks at the company's design studio in Hawthorne on March 14.
The electric-car maker filed Thursday to sell $1.35 billion in notes and about $650 million in shares. Tesla stock, which has plunged 30% this year, surged as much as 5.9% in premarket trading, and its bonds rallied.“We view this as a clear net positive for Tesla,” Dan Ives, an analyst at Wedbush Securities, said in a note. The company needed to “take its medicine and clear the air of the very real investor worries.
Musk, 47, will participate in the offering by buying as much as $10 million in stock. Tesla hired Goldman Sachs Group Inc., Citigroup Inc., Bank of America Corp., Deutsche Bank AG, Morgan Stanley, Credit Suisse Group AG, Societe Generale SA and Wells Fargo & Co. to underwrite the share offering, according to the filing.
Tesla’s 5.3% bonds due 2025 were the best performer in the high-yield market early Thursday, rising more than 2 cents on the dollar to 88.063 cents, according to Trace.
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