Tesla has managed to raise a massive $1.2 Billion from sale of common shares and convertible notes. The company had announced its intentions to raise around $1.15 billion as a way to help reduce any risk that could follow its aggressive expansion scheme with regards to the Model 3.
The company has succeeded in raising 1.2 billion in cash from the sale of common shares and convertible notes. The amount includes $350 million in share sales and another $850 million that were raised through senior notes. The notes in question will become due in 2022. Musk, who already has around 21 percent ownership in the company, also made $25 million worth of personal purchase from the common shares.
The amount the company actually raised is somewhat in excess of the amount they were expecting to raise however, it is still less than what many analysts were expecting. The last time the company raised cash via stock offering was in May 2016, when it sold $1.4 billion worth of shares in a bid to expand its production capacity.
Musk had previously said that Tesla would be able to finish its production preparations for Model 3 without requiring new funds. However, while speaking at on the company’s earnings results conference call in February, he had also added that the company would be brought perilously close to the edge in terms of its overall cash position.
So, this cash raise is more with an eye towards making preparations for contingencies and offset risk for shareholders, as compared to any real, urgent need on Tesla’s part.
