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Tesla To Raise Over $1.15 Billion To Help Offset Risk For Model 3 Production (techcrunch.com) 86

Tesla is looking to raise a total of around $1.15 billion from stock and convertible senior notes as a way to help "further reduce any risks" that it'll incur as it scales its business to handle its aggressive Model 3 production schedule, the company said. From a report: Tesla's decision to pad out its balance sheet with more capital was anticipated by many analysts, and a fair number of Wall Street watchers actually thought Tesla would seek more to help it grow based on recent comments made by Tesla CEO Elon Musk. The Model 3 is set to begin full production this year, with pre-production begun in February with a temporary production line pause to help get processes at its Fremont factory ready for the new vehicle. The split of the new funding efforts will see Tesla pursue $250 million in common stock offering, with $750 million raised via convertible notes due in 2022. Elon Musk himself will personally contribute by buying $25 million in Tesla stock.
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Tesla To Raise Over $1.15 Billion To Help Offset Risk For Model 3 Production

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  • Last fall, Tesla reported a Q3 quarterly profit just before the vote to buy up failed solar city (bailing out Elon Musk who was over levered with their worthless stock and debt). At the time, I pointed out that they were playing a lot of financial tricks to get that profit to lube up shareholders prior to the vote. Some people insisted they were now profitable. Well, they're not. They reported more losses in Q4 and now they need another billion. The model 3 will be delayed, it will be more expensive tha
    • They've taken on far too much. The Model 3 should have happened right after the Roadster, and they should simply have iterated over it, increasing quality and reducing costs over time. The Model S, and especially the Model X, have been extremely costly and pointless diversions. Launching new models is something you do when you can put in the kind of capital investment major vehicle manufacturers are able to pump in.

      Their financial accounting is creative to say the least, even by normal standards these da
      • by Anonymous Coward on Thursday March 16, 2017 @09:56AM (#54050871)

        They couldn't do the model 3 because batteries were still too expensive. It was only possible now.... which is why they did it now.

        When the batteries cost $45,000 you can't make a $35,000 car.

  • will be gleefully happy.

    When Apple issues corporate bonds despite having $200 Billion in the bank, nobody bats an eyelid. When a business that is in a relatively early state of growth and wants to fund expansion decides to borrow money (Tesla), suddenly we have people accusing Musk of being a freeloader and a charlatan, whose businesses must be on the verge of collapse.

    Almost all companies who intend to grow quickly borrow money to do so, especially with interest rates being historically low. It would be ba

  • I find it surprising that the stock is trading nearly 3% higher on this news. Normally a stock would lose value because the shares will be diluted. (There should be some correlation between the assets of the company and the value of all the outstanding shares) I think investors are pleased that Tesla will have enough cash on hand to achieve it's goals.
    • by Anonymous Coward

      It was already priced in, as it had been expected by analysts - and the amount is smaller than had been expected.

    • Re:Stock is Up (Score:4, Informative)

      by Rei ( 128717 ) on Thursday March 16, 2017 @10:58AM (#54051359) Homepage

      Markets factor in things that might affect the stock before official announcements, based on what they expect the announcement to indicate. The stock is up because the capital round is smaller than the market had thought would be necessary.

  • Tesla will be mandatory reading for the MBAs in 5 years as a textbook example of corporate fraud and accounting chicanery. Yes I am long on way out of the money puts on this P.O.S and fully expect to nicely rewarded for it in the future. I am all for success and I hold no grudges against Elon, hell I envy his SpaceX. Without the energy credits and the pump-n-dump of the stock, this thing is a turd. It is a cult stock, you either love it as the next Apple or hate it as the next Theranos. Time will
    • by zerofoo ( 262795 )

      A Theranos comparison? Really?

      Tesla is producing real products (unlike Theranos) and is delivering slightly more cars per year than that little Stuttgart automaker Porsche.

      However, unlike Porsche, Tesla is investing in one of the largest and most cost-effective battery factories in the world. It is possible that when Gigafactory is running at full-scale, most of the electric auto manufacturers and power companies will be buying batteries and energy storage systems from Tesla.

      Tesla isn't anything like Ther

    • Energy credits are a government subsidy to support electric car producers, but it's hardly a unique situation. The government subsidizes everything from corn production to aeronautics. If you are arguing that the solar power industry would not be profitable without government subsidies, than you'd have to ask yourself if the same would be true without all the government spending on stabilizing world oil supplies.

I haven't lost my mind -- it's backed up on tape somewhere.

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