![]() ![]() Tesla entered an equity distribution agreement with banks including Goldman Sachs and Citigroup Global Markets to sell its common stock, having aggregate sales proceeds of up to $5 billion. Tesla is expected to be the largest addition to the stock market index in its history. Since the announcement, shares of Tesla are up 57.3%. Tesla's most recent rally was driven by its announced inclusion in the S&P 500 beginning Dec. That includes a 5-for-1 stock split in August. Shares of the automaker are up roughly 670% this year. The company's shares, which touched a record high on Monday, reversed course to fall 1.1% in premarket trading Tuesday. "Now in a clear position of strength and out of the red ink with major factory build outs on the horizon (Austin and Berlin), Musk and his red cape are raising enough capital to get the balance sheet and capital structure to further firm up its growing cash position and slowly get out of its debt situation, which throws the lingering bear thesis for Tesla out the window for now," he wrote. Wedbush analyst Dan Ives said in a note Tuesday the capital raise is a "clear positive and further solidifies" the bull case for Tesla. Operating expenses for Tesla jumped 33% in the third quarter from the previous three months to $1.25 billion. And so it's quite hard to spend money without wasting it." "We're trying to spend money at the fastest rate that we can possibly spend it and not waste it," Tesla CEO Elon Musk said during the company's third quarter earnings call. Tesla warned investors of its upcoming spending in October, saying it planned to spend $2.5 billion in 20, especially on new factories and expansion, including battery cell manufacturing. Building new plants is extremely capital intensive for automakers. The plan comes at an important time for Tesla, which is in the process of building new factories in Germany and Texas as part of its global expansion. ![]() With Tesla's market capitalization at $598 billion, the new offering represents less than 1% of the company's value. ![]()
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