Electric carmaker Tesla Inc. (NASDAQ:TSLA) is selling $5 billion U.S. of shares in an effort to capitalize on its recent stock split that made it more accessible to retail investors.
Tesla said it will sell the shares "from time to time" through an agreement with several banks, according to a regulatory filing. The Palo Alto, California-based company plans to use the money to strengthen its balance sheet and for general corporate purposes.
Tesla is raising money while it expands with new manufacturing centers in Germany and Austin, Texas, following the recent completion of a factory in Shanghai, China. It’s a pivotal time for the manufacturer, which faces more competition from established automakers and start-ups that are aiming to hone in on its lead in electric vehicle sales.
The new program is the largest equity raise ever for Tesla. Until now, Tesla had raised about $14 billion U.S. over the past decade through secondary stock offerings, most recently in February of this year. The sales have helped bolster cash during Tesla’s transition from a niche electric vehicle maker to a mass market automaker.
Tesla shares fell 3.2% to $482.44 U.S. each in New York trading on Tuesday. The stock has climbed almost 500% this year, accounting for the five-for-one stock split that became official on August 31.
Tech Insider
