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TSLA Extends Losses After Announcing $2 Billion Stock Offering

Courtesy of ZeroHedge View original post here.

Tesla shares are extending overnight losses (following the Model X recall) after announcing a $2 billion secondary stock offering.

Official Statement:

Tesla today announced that it intends to offer approximately $2 billion of common stock in an underwritten registered public offering. Tesla has also granted the underwriters a 30-day option to purchase up to approximately $300 million of additional common stock.

Elon Musk, Tesla’s CEO, will participate by purchasing up to $10 million of common stock in this offering. In addition, Larry Ellison, a member of Tesla’s Board of Directors, will purchase up to $1 million of common stock.

The aggregate gross proceeds of the offering, assuming full exercise by the underwriters of their option to purchase additional securities, would be approximately $2.3 billion before discounts and expenses. Tesla intends to use the net proceeds from the offering to further strengthen its balance sheet, as well as for general corporate purposes.

This decision comes just two weeks after Musk said on the earnings call thatit doesn’t make sense to raise money… we are cashflow positive.”

The stock offering is reportedly set to trade February 14th.

For some context, Elon Musk’s purchase of $10 million of stock in this offering represents roughly 0.03% of his ~$30B net worth. Now that’s confidence!

Shares are down over 5% in the pre-market…

Will this break the momentum monkeys rule?


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