The Model 3 is the linchpin of Tesla's plan to become a larger auto maker, with the sedan's $35,000 starting price aimed at the mass market that could not afford the company's previous offerings, the Model S and Model X. The influx of cash takes some of the risk out of the Model 3 launch and provides additional capital for either Model 3 production equipment or investment in the company's battery factory, analysts at Baird said in a note.
The company plans to offer US$250 million worth of common stock and US$750m in notes due in 2022.
Tesla said it would use the proceeds to "strengthen its balance sheet and further reduce any risks associated with the rapid scaling of its business due to the launch of Model 3, as well as for general corporate purposes". General Motors, the leading US automaker, is hoping to challenge Tesla's lower-priced model with its own Bolt electric vehicle.
Tesla will have spent about $10 billion in R&D and capital expenditures since 2014, according to Morgan Stanley.
Tesla CEO Elon Musk is expected to purchase $25 million of common stock, amounting to 96,900 shares at the public offering price. Tesla Inc. (NASDAQ: TSLA) is not most companies. When pressed via a series of questions to his Twitter posts about whether Tesla would raise funds in 2017, Musk said on October 9: "Probably not then either". Which explains why the Silicon Valley-based company needs to raise fresh capital.
US, Israel move closer to agreement to curb settlements
In December, the United Nations passed a resolution that slammed Israeli settlements as a "flagrant violation" of worldwide law. Peace talks between Israel and the Palestinians have been frozen since 2014 and settlements are one of the most heated issues.
Sam Allardyce nearly signed Everton's Gerard Deulofeu for West Ham United
He could yet return to Everton or extend his loan move at the San Siro during a summer likely to be partly dominated by the future of the winger.
Victor Moses ruled out of Super Eagles friendlies
The Lions of Teranga and the Eagles have met twenty times since their first encounter on February 27, 1963 in the Kwame Nkruma Cup.
Since the start of the year through March 15, Tesla shares had risen 20 percent. Tesla's Model 3 was on track to begin production in July, with output gradually ramping up to 5,000 vehicles weekly by the end of this year, according to executives.
The convertible notes will give Tesla some flexibility, Levy noted.
The company lost just under $675 million a year ago but revenue rose 73 percent to just over $7 billion.
We view the offering positively as it should help de-risk the Model 3 launch, provide additional capital for Model 3 production equipment and/or investment in the gigafactory, and remove an overhang on the stock.