August 13, 2015
Tesla Motors wants to raise half a billion dollars through the sale of 2.1 million shares — and CEO Elon Musk plans to get the ball rolling with a significant purchase.
A filing with the Securities and Exchange Commission revealed that Musk “has indicated his preliminary interest in purchasing up to an aggregate of 83,974 shares of our common stock in this offering at the public offering price for an aggregate purchase price of approximately $20 million.”
Musk currently owns a 22.25 percent stake in the electric car firm, making him the largest shareholder.
The sale of stock is a bid to get cash to put toward the development of its energy business, its impending Model 3 vehicle and its battery Gigafactory.
Tesla’s shares were up 2.2 percent at $243.50 in premarket trading this morning. The company’s shares had dipped 12 percent since Aug. 5 when Tesla recorded its latest quarterly results.
News of the sale comes soon after it came to light that Tesla loses $4,000 on every one of its Model S electric sedans it sells.
Musk admitted the loss on car sales has him looking at other means to raise some capital and he had said selling some stock was a good option.
Musk has even set a deadline of 2016’s first quarter for the company to start turning a profit. He has told investors that is when the automaker will be turning enough profit to expand its line from just one vehicle to a small fleet of multiple vehicles.
The struggles being faced by Tesla aren’t necessarily anything new. The auto industry is notorious for ebbs and flows in success and in generating revenue. Tesla itself has faced numerous challenges but Musk has managed to steer the company in the right direction.