Tesla raises $1.2 bln, tapping market again for funding

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The Palo Alto, Calif. -based manufacturer sold stock at $262 per share, totaling almost $350 million in proceeds, and issued convertible notes worth $850 million, according to a document filed Friday with the Securities and Exchange Commission.

Tesla's shares were up 0.3 per cent at $262.71 in premarket trading on Friday. Musk has been borrowing hundreds of millions from Morgan Stanley and Goldman Sachs in order to participate in nearly all of Tesla's new capital raises and maintain his large stake in the company, which is now worth about $9 billion out of a total valuation of $42.5 billion. In a note to investors, Colin said that the Palo Alto Company could opt to raise more funds if production and delivery of Model 3 is delayed.

The future of Tesla's profitability will be dictated by the commercial success of the Model 3, which makes the most affordable vehicle ever offered by this brand its most important product in years.

The $350 million came from the sale of roughly 1.34 million shares at $262 each.

The company's shares, which are down 9 percent since a 52-week year high in February, rose 2.1 percent to $261.11 in after-hours trade. The company had planned on selling about $750 million in debt.

Tesla chief executive Elon Musk has indicated his preliminary interest in buying up to 95,420 shares of Tesla common stock for a purchase price of around $25 million in this offering at the public offering price, the company said. With respect to the notes, Tesla intends to enter into convertible note hedge transactions and warrant transactions to limit dilution of its common stock.

Electric vehicle manufacturer Tesla announced on Wednesday that it will raise US$1.15 billion in a series of offerings.

Tesla burned through $970 million in the fourth quarter and expects as much as $2.5 billion in expenditures during the first half of 2017.

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