Tesla approach puts fears of near-term liquidity to rest
Analyst approve of electric carmaker raising $750m selling common stock and $1.6bn from convertible bonds
New York/San Francisco — Tesla has raised $2.35bn through debt and stock offerings that expanded from the company’s initial plans, helping to put some near-term liquidity fears to rest. The electric carmaker raised $750m selling common stock and $1.6bn from convertible bonds, up from originally offering $650m and $1.35bn. The capital raise sparked a relief rally in both Tesla’s stock and bonds, which had reflected investor worry over whether the company can be sustainably profitable. “The raise should refute lingering concerns about Tesla’s ability to access capital markets,” Ben Kallo, a Robert W Baird & Co analyst who rates Tesla the equivalent of buy, said in a note on Friday. “Surplus cash should help alleviate investor concerns around liquidity.” Tesla priced the stock at $243 per share and will pay 2% semiannual interest on the convertible bonds due 2024, which were issued with a 27.5% conversion premium, according to filings. Tesla stock, which had been down 30% this year, ...
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