Tesla Offering More Stock; Musk Investing $100 Million
Tesla, riding a hot stock that has jumped more than 100 percent in the last two months, is planning to offer another 2.7 million shares. The additional stock, along with the offering of convertible senior notes due in 2018, is expected to generate $830 million for the electric-car company.
Shares of Tesla jumped more than 6 percent in after-hours trading once Tesla announced the offerings.
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Tesla says it will use some of the proceeds to pay off what's left of the company's $465 Million Department of Energy loan it took out in 2010. The remainder will be banked for future undisclosed needs.
Musk in for $100 Million
Tesla CEO Elon Musk is planning to buy $100 million worth of Tesla stock. Shares totaling $55 million will be purchased directly from Tesla and the other $45 million will come from the subsequent common stock offering.
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For months, the electric-car company's founder and CEO has talked about putting his money where his mouth is. His latest move is not only a major financial commitment, but will reinforce the confidence many investors have in Musk and his company.
Goldman Sachs is running the stock offering. The convertible notes offering will be run by Goldman Sachs, Morgan Stanley and JPMorgan. Earlier this week, Morgan Stanley raised its price target for Tesla shares from $47 to $103.