Tesla looks set to become one of the few high profile companies backed by the government as part of the Department of Energy’s loan program for clean tech companies, that actually succeeds. Solyndra was the most famous failure, but recently Fisker, another electric car maker, has ventured close to bankruptcy, failing to pay the first instalment on its $192 million government loan.
Just one week ago Tesla astounded the market by announcing its first ever profits and absolutely blitzing all analyst predictions for first quarter earnings and revenue. The success was led by incredible sales figures for the all-electric Model S luxury sedan, which saw 4,900 deliveries made against an expected 400.
Tesla intends to continue with this success by selling 2.7 million new shares and raising $450 million in a bond sale. CNN Money reports that in total the company hopes to raise around $850 million, part of which will go to paying off the $465 million loan from the DoE earlier than forecast, and the rest will be invested in other areas of the business.
Elon Musk, Tesla’s CEO, has already said that he will buy $100 million worth of new stock. Normally such share offerings cause market prices to fall, but due to Tesla’s strengths, and the confidence that Musk is showing by investing in the company himself, Tesla’s share price actually grew 6% in after-hours trading on Wednesday.
Tesla’s stock value is up 150% so far this year, driven by great performance, and confidence of further success in the future.
By. Charles Kennedy of Oilprice.com
Be the first to comment on this article.