- General
- December 8, 2020
- 3 minutes read
Tesla Seeks $5B From Share Sale
As its shares have soared high, the electric carmaker Tesla has filed to raise as much as $5 billion from…
As its shares have soared high, the electric carmaker Tesla has filed to raise as much as $5 billion from a new share sale that’ll mark its third such sale this year. In a filing to the SEC, Tesla revealed that it’s seeking to raise $5 billion from the issuance of shares that’ll be sold over time at prevailing market prices.
The new share sale would place Tesla’s cash balance at nearly $20 billion if completed, given that the company reported having $14.5 billion in cash at the end of September. With Tesla’s stock price soaring about 650% this year, it’s likely that its $5 billion targeted raise will be swiftly met and probably oversubscribed.
A $5 billion cash top-up would do well for Tesla as it embarks on capital-intensive projects which include the construction of two new factories, one in Texas in the US and another in Germany.
Notably, Tesla closed a $5 billion share sale just this September and a previous $2 billion sale in February. Investors have had high sentiment for Tesla and the general electric car market this year, leading to record fundraisings for electric carmakers.
This year has seen the public market debuts of electric carmakers such as the Chinese electric carmakers Xpeng and Li Auto, which have both seen their share price soar in the months after their public debuts. For reference, Xpeng now sporting a market value of $36 billion compared to $11 billion at debut and Li Auto at $30 billion compared to $10 billion at debut.
This year has also seen several electric car startups clinch deals to hit the public markets by the way of blank-check mergers, among such the UK-based Arrival, US-based companies Canoo and Lordstown Motors.
