Tesla Stock Shows Weakness As It Takes On Ambitious Goals

Tesla said it would seek to raise up to $2.89 billion in capital through a stock sale in connection with the merger. Talks about the Tesla Model 3 keep pointing out various great details about the auto, and its battery has especially been the subject of much attention lately. Image source: Tesla Motors. Since the Model S first went on sale, Tesla has fixed bugs, improved performance and added new features via these free updates, which are sent to the vehicle via its internet connection at night, while it is recharging. The company intends to spend the money garnered from its fundraising efforts to set up production lines for the Model 3. The $5 billion battery facility is expected to pave the way for Tesla to produce affordable cars, as it will help lower the cost of battery acquisition.

Tesla Motors Inc (NASDAQ:TSLA) just announced a second round of financing to fund Model 3 production and equipment for its gigafactory, which it’s hoping to complete before the Model 3 release. Tesla shares slid significantly when the merger was first proposed in June and they have tumbled about 10 per cent since the beginning of August when it was made official. Available for all their vehicles, the program could even act as a bridge for buyers who have already placed pre-orders for the Tesla Model 3.

As the uncommented code reveals, Tesla is likely planning to offer a payment option for Model 3 owners to pre-pay for Supercharger Credits, measured by kilowatt hours of charging.

SolarCity is apparently in need of quite a bit of cash, which will be a heavy weight unloaded onto Tesla Motors if the merger of the two companies actually comes to pass.

Tesla said in the filing that it will have to shell out $422 million to bondholders during the third quarter and that it will have to raise more capital before the end of the year. Over the same one-year period, SolarCity lost $94.9 million on $537.7 million in revenue.

As a result, Tesla would have around US$400 million in cash at a time when both Tesla and SolarCity have been burning through cash.

Advertisement

Tesla received approval from federal anti-trust regulators from the Federal Trade Commission to acquire the struggling SolarCity, a company in which Elon Musk has previous ties with, as Solar City’s current largest shareholder and cousin of its CEO.