• 3 minutes Biden Seeks $2 Trillion Clean Energy And Infrastructure Spending Boost
  • 6 minutes Pompeo upsets China; oil & gas prices to fall
  • 11 minutes The Secret China Iran Oil Deal At The Heart Of One Belt One Road Project
  • 7 mins Trump Suggests Delaying Election Amid Fraud Claims
  • 1 min The World is Facing a Solar Panel Waste Problem
  • 25 mins While U.S. Pipelines Are Under Siege, China Streamlines Its Oil and Gas Network
  • 15 hours End Game For Oil? OPEC Prepares For An Age Of Dwindling Demand
  • 1 min Rational analysis of CV19 from Harvard Medical School
  • 5 mins Trumpist lies about coronavirus too bad for Facebook - BANNED!
  • 23 hours Trump Hands Putin Major Geopolitical Victory
  • 10 hours Biden admits he has been tested for Cognitive Decline several times. Didn't show any proof of test results.
  • 53 mins Why Oil could hit $100
  • 2 days Enough is Enough...
  • 10 hours Gazprom fails to exempt Nord Stream-2 from EU market rules
Demand For Offshore Oil Rigs To Return In 2022

Demand For Offshore Oil Rigs To Return In 2022

Demand for offshore rigs will…

Venezuela’s Rig Count Officially Falls To Zero

Venezuela’s Rig Count Officially Falls To Zero

Venezuela no longer has any…

Tesla To Raise $2.3B Capital In Long-Awaited Move    

Tesla said on Thursday that it would be looking to raise as much as US$2.3 billion through offering common stock and convertible bonds in a move that analysts describe as “net positive” and probably long overdue.

Tesla’s chief executive Elon Musk had insisted in recent years that the electric vehicle (EV) maker didn’t need capital injections despite burning cash fast and rarely posting profits.

Many analysts, on the other hand, have been saying for several quarters that Tesla needs to raise capital—in the region of US$2 billion to US$4 billion—to start delivering on its bold promises, or as Tesla bears have claimed, simply to keep the company afloat.   

After disappointing deliveries and a big loss in the first quarter of this year, Musk suggested last week that “There is some merit to raising capital,” and said that the time may be about right to raise capital.

In its earnings release last week, Tesla said that it ended Q1 2019 with US$2.2 billion of cash and cash equivalents, down by US$1.5 billion from the end of 2018. The reduction was the result of a US$920-million convertible bond repayment and an increase in the number of vehicles in transit to customers at the end of Q1.

So Tesla announced on Thursday offerings of US$650 million of common stock and US$1.35 billion aggregate principal amount of convertible senior notes due in 2024. Musk will take part in the offering by buying US$10 million of Tesla’s common stock, the company said, noting that it “intends to use the net proceeds from the offerings to further strengthen its balance sheet, as well as for general corporate purposes.”

Related: Contaminated Crude Adds Insult To Injury For European Refiners

Tesla “needed to rip the bandaid off” and the raising of capital is a “net positive” move, Dan Ives, managing director at Wedbush, told Bloomberg on Thursday, commenting on Tesla’s capital raising plan.

According to Wedbush, Tesla may need US$3-4 billion, but the US$2.3 billion capital raise is a good start, which would lead to a “near-term relief rally” on this news.

Tesla’s (NASDAQ: TSLA) shares were indeed rallying 4.27 percent at 2:12 EDT on Thursday.

By Tsvetana Paraskova for Oilpricecom

More Top Reads from Oilprice.com:



Join the discussion | Back to homepage



Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News