A day after its 5-for-1 share split took effect, Tesla Inc on Tuesday announced plans to sell up to US$5 billion of common shares.
The electric vehicle and solar panel maker said in a filing with securities regulators that it intends to sell up to 10.03 million shares and use the proceeds for unspecified general corporate purposes.
The sales would be made “from time to time” and Tesla said the actual amount of the offering cannot be determined at present.
The shares would be sold through 10 different brokerage houses, and each would get a 0.5 percent commission.
Tesla shares on Tuesday closed down 4.7 percent at US$475.05. The filing with the US Securities and Exchange Commission came before the markets opened. Any share sales would likely dilute the value of current shareholders’ investments.
As of June 30, Tesla had US$8.6 billion in cash and about US$8.5 billion in debt excluding vehicle and solar panel financing.
The company has to finance some big-ticket capital spending this year, because it is building a new factory in Germany and has plans for an additional plant outside of Austin, Texas.
It is also gearing up to roll out its new “Cybertruck” pickup and a semi sometime next year.
Wedbush Securities Inc analyst Daniel Ives wrote in a note to investors that the timing of the equity offering is good in order to shore up the Palo Alto, California, company’s balance sheet.
There is strong demand from investors at present to buy Tesla after a huge rally, he wrote.
Tesla chief executive officer Elon Musk is “raising enough capital to get the balance sheet and capital structure to further firm up its growing cash position and slowly get out of its debt situation,” Ives wrote.
The added capital “throws the lingering bear thesis for Tesla out the window for now,” he added.
POOR INTERNAL CONTROLS: Insurance Bureau Director-General Shih Chiung-hwa said the company is expected to get back on track while its chairman is suspended The Financial Supervisory Commission (FSC) yesterday fined Shin Kong Life Insurance Co (新光人壽) NT$27.6 million (US$939,415) for a reckless investment that endangered its solvency, and suspended its chairman Eugene Wu (吳東進) for poor supervision. The penalty is the second-highest in a single case after Nan Shan Life Insurance Co (南山人壽) was fined NT$30 million in September last year and its chairman Du Ying-tzyong (杜英宗) suspended for two years, the commission said. In three rounds of special and regular examinations conducted since last year, the commission found that Shin Kong Life had given too much power to an asset and liability management committee
Tesla Inc is planning to ship vehicles made at its Shanghai Gigafactory to other markets in Asia and Europe, people familiar with the matter said, as the company looks to realize its plan to reduce shipping costs and manufacture vehicles closer to customers. China-built Tesla Model 3s intended for delivery outside China would likely start mass production in the fourth quarter of the year, the people said, asking not to be identified because the details are private. They said the markets targeted include Singapore, Australia and New Zealand, as well as Europe, where customers currently have to wait for a Tesla to
Continental AG, which makes control units for Daimler AG cars, cannot pursue antitrust claims against a group of patent owners, including Qualcomm Inc, which are seeking royalties on telecommunications technology, a federal judge in Texas ruled. Avanci LLC, a licensing pool formed by Qualcomm, Nokia Oyj, Sharp Corp and other owners of patents on technology standards, is not breaching antitrust laws when it negotiates license agreements with automakers rather than the component makers, Barbara Lynn, chief district judge for the Northern District of Texas, said in dismissing the suit in a decision posted on Friday. The licensing group charges US$15 per vehicle
Nano-X Imaging Ltd, a start-up founded by Israeli investor Ran Poliakine, is joining forces with South Korean chipmaker SK Hynix Inc to build a machine that could disrupt a century-old X-ray industry. Valued at about US$2 billion after listing on the NASDAQ last month, Nano-X is seeking to transform a multibillion-dollar industry that has essentially relied on the same technology since Nobel Prize in Physics winner Wilhelm Roentgen discovered X-rays in the late 19th century. Nano-X’s device uses semiconductors instead of metal filaments to generate X-rays. The backing of SK Hynix, the world’s second-largest maker of memory chips, is a boost for