Tesla Raises $2 Billion: Did Elon Musk Lie to Investors? – CCN.com

Tesla Raises $2 Billion: Did Elon Musk Lie to Investors? – CCN.com

Elon Musk
It has been two weeks since Elon Musk told investors Tesla wasn't seeking any additional capital raises. Yet on Thursday, the company announced it would raise an additional $2 billion via stock offering. | Image: AP Photo/John Raoux, File Tesla will dilute shareholders by issuing $2 billion worth of additional stock. Elon Musk told investors that a capital raise “doesn’t make sense” just two weeks ago. While the stock dipped in pre-market trading, shares have recovered most of the losses. Tesla (NASDAQ:TSLA) has decided to dilute its investors by raising $2 billion worth of capital through a stock offering along with a $300 million greenshoe option for the deal’s underwriters. The company’s CEO, Elon Musk, plans to purchase $10 million while billionaire board member Larry Ellison will purchase $1 million worth of the new stock. This decision comes just weeks after Elon Musk suggested that Tesla was not interested in any more capital raises. It looks like the company’s monster rally changed his mind. Nevertheless, investors are taking the news in stride with shares up slightly in early morning trading. Tesla’s stock is up despite the bad news. | Source: Ycharts.com Elon Musk Breaks His Promise Elon Musk made many ....


Perhaps most notably, he claimed that Tesla wouldn’t issue more shares to generate cash. The controversial CEO stated the following on Jan 30: Well, we’re actually spending money as quickly as we can spend it sensibly. So if there’s any sensible way to spend money, we’re spending it. And then despite all that, we are still generating positive cash. So in light of that, it doesn’t make sense to raise money because we expect to generate cash despite this growth level. Just two weeks later, Elon is changing his tune. Perhaps, Tesla’s monster rally convinced even him that the company is overvalued. Here is how much Tesla’s share price rocketed in the weeks following fourth-quarter earnings: Tesla’s stock has soared after fourth-quarter earnings. .

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