Tesla Motors Inc (TSLA) Announces Stock Offering With CEO Musk Investing $100 Million
Tesla Motors Inc (NASDAQ:TSLA) announced after the market closed on Wednesday that they will be raising capital by offering 2.7 million shares of common stock and $450 million in convertible notes. Tesla Motors CEO Elon Musk is investing $100 million into the company by buying $45 million worth of shares in the public offering (530,410 shares at Wednesday close of $84.84) and another $55 million directly from Tesla in a private placement due.
Tesla is expecting that the proceeds from the offerings, including an option granted to underwriters for an additional 405,454 shares of common stock and $67.5 million worth of notes and private placement, to hit around $830 million. Tesla is going to use the money from the stock offering to repay the loan from the U.S. Department of Energy ahead of schedule. It will also be used to cover the cost of convertible note hedge transactions in connection with this offering and for “general corporate purposes.”
Tesla added that the notes will be convertible into cash and shares of Tesla’s common stock if applicable. The interest rate, conversion price, and other terms are still being determined. Goldman, Sachs & Co. is managing the stock offering. Goldman is going to work with Morgan Stanley and J.P. Morgan to jointly manage the notes offering.
This article was written by Amit Chowdhry. You can follow me at @amitchowdhry or on Google+ at +AmitChowdhry