Tesla Offers $1.4 Billion In Stock To ‘Accelarate’ Model 3 Production
Tesla Motors has high hopes that it will secure a key piece of financing soon in order to “accelerate” production of the Model 3 from 2020 to 2018. To make this happen, the electric vehicle company is offering some stock that would total about $1.4 billion.Advertisement
The company revealed that as of May 15, it is currently hanging on to as much as 373,000 customers deposits for its latest car, the Model 3. The number already represents the net total reservation, taking into account 8,000 canceled reservations as well as 4,200 reservations canceled by Tesla itself since they believe it to be mere duplicates from speculators.
Moreover, Tesla added, “If we wanted to, we believe that we could further increase the number of Model 3 reservations with minimal effort, but believe it is better to guide customers to purchase products currently in production.”
The company believes that it remains on track for volume production and deliveries of the Model 3 in late 2017. However, as the company is facing a surge in demand, it has decided to advance its plans to a 500,000 vehicle build plan concerning all car models to 2018, instead of 2020.
According to Tesla’s Prospectus Filed Pursuant to Rule 424, Tesla is now offering 6.8 million shares of common stock. The proceeds the company expects to earn from this are amounting to approximately $1.4 billion at minimum, with about $1.7 billion expected should underwriters exercise their option to purchase additional shares from Tesla in full. Moreover, this expected earning was computed at an expected public offering price of $204.66 per share.
With the proceeds, Tesla said that it hopes “accelerate the production ramp of the Model 3.” Moreover, it is also looking to use part of the net proceeds for working capital and general corporate purposes.
Currently, Tesla’s stock (TSLA) is up by 3.181 percent to $211.17.