Tesla’s coffers are further being flooded with surplus capital, courtesy of the Chinese internet giant Tencent Holdings Ltd. The latter has today announced that it has acquired a 5 percent stake in the electric automaker, thus, causing its share prices to skyrocket in the current trading session.

According to an official regulatory filing with the U.S Securities and Exchange Commission (SEC) on Tuesday, Tencent has revealed that it provided the automaker with about $1.8 billion capital in exchange for the shares of the company. This makes the China-based company one of the largest shareholders in Tesla, fifth largest to be exact. It follows pursuit to the CEO Elon Musk, who is the highest shareholder, and three other executives.

In the regulatory filing, Tencent writes about the share buyout as under:

The 8,167,544 shares of Issuer common stock were acquired by the reporting persons in a registered offering of common stock by the Issuer on March 17, 2017 and through open market purchases, for an aggregate purchase price of $1,777,842,836 (including commission).

The Chinese giant’s stake in Tesla is passive as it has not asked for a position on the board or any changes to the company. This enables Tencent to inadvertently join the electric, as well as autonomous revolution, which is expected to catch heat in the coming years. The company has also been backing other such automotive upstarts, such as NIO (formerly known as Next EV) and Future Mobility Group. The former recently bagged a hefty $600 investment from Chinese search giant Baidu as well.

Tencent’s investment into Tesla could potentially be focused only towards reaping the benefits of its investment, which have already increased by a fourth today itself. Its stake in the U.S.-based electric automaker is currently valued at about $2.2 billion as compared to the $1.8 billion investment. Commenting on their investment, a Tencent spokesperson said,

Tesla is a global pioneer at the forefront of new technologies. Tencent’s success is partly due to our record of backing entrepreneurs with capital; Elon Musk is the archetype for entrepreneurship, combining vision, ambition, and execution.

As for the share prices of the electric automotive giant shot up close to 3 percent in pre-market trading due to the disclosure of the said investment. And it still continues to trade at $277.38, which is about 2.65 percent increase over the previous day. Here’s the ticker for the today:


This development for Tesla comes on the heels of the company’s recent fundraising, where it managed to pick up $1.2 billion through a share and debt convertible notes sale. This amount includes $350 million in share sales and another $850 million that were raised through senior notes. Musk, who already has around 21 percent ownership, also picked up common shares worth $25 million during the sale. These funds are being employed by Tesla to stay on track for the release of its upcoming affordable EV called Model 3.

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