A week after posting a huge first-quarter loss and saying the company needs to raise cash, Tesla is doing just that. The company previously warned that first quarter income will be negatively impacted, because of lower than expected delivery volumes and several pricing adjustments., Tesla said this month it delivered 63, 000 vehicles throughout the quarter, well below analysts consensus estimates of 76, 000.
If all the options are exercised, the gross proceeds would come to about $2.3 billion before discounts and expenses, Tesla said.
One of the offerings announced today will make $650 million in common stock available, while the second offering calls for the issuance of up to $1.35 billion in convertible senior notes due in 2024.
In terms of safety, though the auto is yet to undergo any EuroNCAP testing, the Model 3 recently achieved the lowest probability of injury in any vehicle ever tested by the US's NHTSA (National Highway Traffic Safety Administration).
Tesla offers Model 3 customers a choice of five colour options with solid black included as standard.
However, worries remain about Tesla's profitability in the broader economic picture.
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Tesla's (NASDAQ: TSLA) shares were indeed rallying 4.27 percent at 2:12 EDT on Thursday.
All Model 3 customers have pay-per-use access to our global Supercharger network, which is reserved specifically for Tesla owners.
The coupon for the debt offering, however, was set at 2.0 percent - the top of the indicated range - suggesting the company had ceded ground to investors to borrow so much.
Goldman, Morgan Stanley and Bank of America have $507 million in outstanding personal loans to Musk, with his Tesla shares put up as collateral, according to Thursday's prospectus.
It definitely was a sneaky way to meet the regulations especially considering that while the Standard Range Model 3 is available for purchase, having it as a secret "off-menu" item that 90% of people won't know about, might as well mean its unavailable. The offering was increased from 2.7 million shares.
Tesla's share price has fallen close to 30% in the last six months as investors have grown concerned about the company's future.