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Tesla plans $2 billion offering amid stock boom

Video credit: Reuters Studio
Published on February 13, 2020 - Duration: 01:06s

Tesla plans $2 billion offering amid stock boom

Tesla on Thursday announced plans to raise $2 billion in a stock offering, tapping into an astronomical jump in its share price over the past few months and reversing the electric-car maker’s often-stated policy of avoiding sales of new stock.

Yahaira Jacquez reports.

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Tesla plans $2 billion offering amid stock boom

Tesla on Thursday - in an about-face - announced plans to raise $2 billion in a stock offering to take advantage of an astronomical jump in its share price.

This coming despite CEO Elon Musk repeatedly telling investors that the company didn't need Wall Street's help.

Just last month, Musk said quote: "it doesn't make sense to raise money.

Diluting the company to pay down debt doesn't sound like a wise move." But, only two weeks after that comment, the company will now offer 2.65 million new Tesla shares, with Musk and board-member Larry Ellison participating in the offering.

Tesla says it plans to use the cash to strengthen its balance sheet and for general corporate purposes.

Tesla's shares initially fell on the news but then rose on Thursday.

Its stock has more than tripled since October when the company posted a rare quarterly profit.

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Tesla Inc said on Thursday it plans to raise $2 billion by selling shares through a public offering.
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