Elon Musk, the company’s chairman, also promised to purchase $25 million of the stock.
Tesla gained massive momentum from a spike in share price that began at the end of previous year, and it is this that has so far fuelled the company’s progress.
Tesla is facing some expensive months ahead as it prepares to produce the Model 3, continues to scale its massive battery factory outside of Reno, and integrate SolarCity into its business.
Tesla and SolarCity merged previous year, Musk said, so the company could more effectively incorporate technology like electric vehicles, solar panel production, and battery storage. When pressed via a series of questions to his Twitter posts about whether Tesla would raise funds in 2017, Musk said on October 9: “Probably not then either”. His borrowings fund an executive lifestyle and let him buy more Tesla shares, which gives him an incentive to perform well as CEO but also could put the company’s stock price at risk.
When most companies announce a secondary offering of stock along with convertible senior notes, the share price drops.
Rumored to arrive as the Tesla Model Y, this compact crossover is expected to be similar in many respects to the Model 3, including on the affordability front.
While raising cash isn’t critical to releasing the Model 3, it would probably be wise, Musk said on the February 22 earnings call.
The first 255 production cars will be special “Launch Edition” models, with a 315-mile range, 1,000 hp, and certain distinguishing trim features. After leading Tesla from the brink of bankruptcy through its 2010 initial public offering, Ahuja retired in 2015 and will return in April to replace Jason Wheeler, a former vice president of finance at Google. Maybe they don’t. But they’re going to learn in a hurry that although Tesla is sometimes thought of as a high-tech hero of Silicon Valley, when it comes to rolling cars off an assembly line, it’s just like any other automaker.
More details about the Model 3 are forthcoming, which could show an edge against rival electric vehicles in terms of performance, battery size and technology, as well as advanced driver assistance systems capabilities, Baird analysts predicted, while mentioning a dinner meeting they had with Tesla management.
The company lost just under US$675m past year but revenue rose 73 per cent to just over $7b.
He predicted that “bears will say the deal is too small”.