Tesla locks in stock surge with $2B offering at $767 per share

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Tesla has priced its secondary common stock offering at $767, a 4.6% reduction from Thursday’s share price close, according to a securities filing Friday.

Tesla said in the filing it will sell 2.65 million shares at that discounted price to increase over $2 billion. Lead underwriters Goldman Sachs and Morgan Stanley have the option to get an shares at the offering.

Tesla shares closed in 804 on Thursday. The share price opened Friday, jumped as high at $812.97 and has hovered approximately $802.

The automaker surprised Wall Street on Thursday as it announced plans to increase more than $2 billion through a common stock that, despite signaling only a couple of months ago that it would not seek to raise more cash.

CEO Elon Musk will buy up to $10 million in shares at the offering, whilst Oracle co-founder and Tesla board member Larry Ellison will purchase up to $1 million value of Tesla shares, as stated by the securities filing.

Tesla said it will use the funds for general business purposes and to bolster its balance sheet. In a different filing Thursday that has been posted ahead of the inventory offering note, Tesla said funding costs could reach as large as $3.5 billion this year.

The stock offering struggles with statements Musk and CFO Zach Kirkhorn created last month during Tesla’s earnings call. An investor asked that given the current run at the share price, why not raise capital and considerably accelerate the growth in manufacturing? At the time, Musk said the company was spending cash wisely and that there is no ldquo;artificial grip back on costs. ”

In the right time of Thursday’therefore announcement, Tesla shares had risen more than 35% because the January 29 earnings call, perhaps proving too enticing of the opportunity to discount.


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