On an analyst ratings scale of 1 through 5, Tesla Motors, Inc. has a rating of 2.73 comprised of the 12 firms that provided ratings.
Advertisement
Tesla said it needs the cash to further development of the Model 3, a lower-cost electric vehicle due out in 2017. Most companies see their share price sag to the offering price or below when they undertake a secondary offering that puts more shares on the market, but not Tesla.
CEO Elon Musk plans to buy $20M worth of stock in the offering and the gesture is certainly showing that Musk is putting his money where his mouth is.
Shares of Tesla Motors have gained 2.4% to $244.03 at 10:17 a.m. today, while Shake Shack has tumbled 8% to $59.60. The Business uses manufacturing procedures and energy management technologies developed for its vehicle powertrain systems and develops stationary energy storage products to be used in commercial sites, homes and utilities. According to comments from management during Tesla’s Q2 call, any decision to raise capital would reflect efforts to reduce risk, and wouldn’t represent a move to keep the company from becoming insolvent. However, right after a short period, the company felt the need to raise capital by selling equity. Tesla told shareholders this month that it now has 487 Supercharger stations globally and is opening one nearly every 24 hours. Company’s cash reserves stand only at $1.15 billion, compared to $1.9 billion at the start of this year. The company has said that it will end the year with $1 billion in the bank, and it has a $750 credit line, but it also spent over $400 million in the second quarter.
Advertisement
Tesla, which was founded in 2003, has never made an annual profit under U.S. accounting standards. Expected to be similar in size to a BMW 3-Series sedan, the Model 3 is expected to offer at least 200 miles of range per charge at a price point of $35,000 before incentives.
