Tesla made a decision that surprised analysts last week. Tesla announced the price of its secondary joint-stock offering, on Friday. The cost of the secondary standard stock offering would be $767 a share, according to the company.
California-based company will sell 2.65 million shares at those prices. Tesla will be able to raise more than $2 billion as a result.
According to the company, Oracle billionaire Larry Ellison will purchase $1 million worth in the offering, and Elon Musk will buy $10 million.
Shares rose 92% as of Thursday from the beginning of the year, interestingly. The company’s decision showed that there is a continued demand for the stock.
The lead underwriters Morgan Stanley and Goldman Sachs have the opportunity to buy additional 397,500 shares in the offering.
Elon Musk stated that Tesla had no intention or need to raise any more capital, only several years ago. The company changed its position in less than one month, however. Tesla plans to use the funds to strengthen its balance sheet as well as for general corporate purposes.
The company mentioned health issues as a risk factor for the first time last week. On February 13, Tesla underlined this problem in a filing.
Another news came from the State of New York, connected with Tesla. Tesla will be able to meet its workforce goals in its Gigafactory in the State of New York, based on the preliminary information.
Moreover, for April 2020, the company reportedly needs to hire only a few hundred workers to meet its target.
The company will avoid a potential $21.2 million penalty as a result.
Initially, the Gigafactory in New York was a factory of SolarCity. Then Tesla acquired this company. The factory’s purpose was to produce the domestic energy product of the company called the Solar Roof, among others. Nevertheless, the company also uses this factory to provide its electric cars.
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