Wedbush Securities' Dan Ives praised Tesla's announcement on Thursday morning of a new $2 billion common stock offering.
"It's a smart, strategic move," Ives said on "Squawk Box." "It takes any doomsday scenario around cash crunch ... off the table."
Shares of Tesla, which have skyrocketed recently, were under some pressure on Thursday after the company said before-the-bell that it's planning a $2 billion common stock offering. It comes just two weeks after CEO Elon Musk said Tesla would not raise more capital.
Musk is set to buy as much as $10 million of stock in this offering, while Tesla board member Larry Ellison will also purchase up to $1 million. The company will offer 2.65 million Tesla shares through underwriters Goldman Sachs and Morgan Stanley.
Tesla said it plans "to further strengthen its balance sheet" with the offering's proceeds. "It's really about the cash crunch. Now they've solidified the balance sheet by deliveries going up into the right," Ives said.
Ives has a baseline price target of $710 per share, and maintains his neutral rating on the stock. He also set a $1,000-per-share bull case on the stock.
Tesla currently has a little more than 180 million shares outstanding.
Shares of Tesla have been on a wild ride in recent sessions.
Especially last week, when the stock jumped nearly 20% on Feb. 3 and increased 13.7% the next day. On Feb. 5, it dropped 17.2%. It's been bouncing up and down since. In the past six months, Tesla shares have surged about 220%.
Tesla at one point earlier in the month reached as high as $968.99.
Also reacting to Tesla's secondary offering, Ark Investment Management founder and notable Tesla bull Catherine Wood said on Twitter on Thursday that the move makes sense.
During last week's ups-and-downs, Wood told CNBC that she stands by her latest five-year price target of $7,000 per share for Tesla.
Ark's most recent best-case scenario is more than double that at $15,000 per share by the end of 2024, while the firm's bear case is $1,500, which would still be about double current levels.
— CNBC's Michael Sheetz contributed to this report.