Tesla (NASDAQ:TSLA) said in a filing on Thursday that it would raise up to $2 billion, with $650 million coming in the form of new equity and $1.35 billion in convertible notes.
CEO Elon Musk announced the intent to buy about $10 million of the company’s stock in the new offering.
The total equity offering is for 2.7 million shares of Tesla. Musk’s purchase would be 41,896 shares. Tesla intends to use the net proceeds from the offerings to further strengthen its balance sheet, as well as for general corporate purposes.
The Palo Alto, Calif-based company put out a release Thursday morning declaring the notes in this offering will be convertible into cash and/or shares of Tesla’s common stock at Tesla’s election.
The interest rate, conversion price and other terms of the notes are to be determined. With respect to the notes, Tesla intends to enter into convertible note hedge transactions and warrant transactions to limit dilution of its common stock.
Musk’s purchases have been reliable short-term buy signals for the stock in the past. Experts note that, following the last five purchases by Musk, the shares were higher on average by 41% in the next three months.
Shares of the controversial electric automaker have been under pressure lately, down nearly 30% from the beginning of the year. Those shares began Thursday trading ahead $9.48, or 4.1%, to $243.49
Goldman Sachs & Co. LLC and Citigroup are acting as lead joint book-running managers for the offering, with BofA Merrill Lynch, Deutsche Bank Securities, Morgan Stanley and Credit Suisse acting as additional book-running managers
