May 15 Tesla Motors Inc, which posted
its first-ever quarterly profit last week, said on Wednesday
that it aims to raise $830 million through a stock and debt
offering that will be used to repay its U.S. Department of
Energy loans with interest.
Chief Executive Elon Musk, who has led the company since
October 2008, will personally buy Tesla shares worth $100
million as part of this latest fundraising round.
The offering comes at a time when Tesla shares are handily
outperforming the Nasdaq. Since reporting first-quarter earnings
on May 8, Tesla shares have risen about 50 percent, while the
index has risen just 2 percent.
Tesla said it will use the proceeds from the offerings to
repay the remaining portion of its $465 million DOE loan, pay
the cost of convertible note hedge transactions and for general
The electric carmaker will offer 2.7 million common shares
as well as $450 million in convertible senior notes due in 2018.
Tesla has also granted its underwriters a 30-day option to buy
an additional 405,454 common shares and $67.5 million in notes.
Musk, who is also a Tesla cofounder, will buy common shares
at the same public offering price. About $45 million would be
bought through the common stock offering announced on Wednesday
and another $55 million would be purchased directly from Tesla
in a subsequent private placement, the company said.
The gross proceeds of the offerings, including the options
granted to the underwriters, and the private placement is
expected to be about $830 million.
Tesla has emerged as a surprising bright spot in the "green"
car industry, which has seen a number of high-profile failures
and struggles over the last year.
Short interest in Tesla has subsided, but many investors
question the company's fundamentals and the current run-up in
In 2012, Tesla began selling the Model S electric sedan,
marking its first attempt to reach a more mainstream market for
electric cars. The company expects to deliver 21,000 Model S
cars worldwide this year, more than many investors expected.