Tesla common stock offering: What 4 analysts are saying


  • On Thursday, Tesla announced plans to raise $2 billion in capital through a common stock offering. 
  • The announcement came just two weeks after CEO Elon Musk said the company did not need to raise capital on the fourth-quarter earnings call. 
  • Here’s what four analysts are saying about the common stock offering and what it means for Tesla. 
  • Watch Tesla trade live on Markets Insider. 
  • Read more on Business Insider. 

Tesla announced on Thursday plans to raise $2 billion in funds through a common stock offering

The announcement from the automaker came just two weeks after CEO Elon Musk said on the company’s fourth-quarter earnings call that it would not raise further capital. Tesla said that the funds will be used to “further strengthen its balance sheet,” according to a press release. 

Shares of Tesla initially slipped in early trading Thursday, but regained throughout the day and closed nearly 5% higher. On Friday, shares of the automaker fell in early trading when the company priced the common stock offering at $767 per share, about 5% lower than Thursday’s close. 

While analysts had long expected that Tesla would raise capital at some point, the announcement Thursday caught some off guard because of Musk’s earlier comments. 

“We are glad Tesla is in a much better financial spot than in spring 2019,” wrote Morningstar analyst David Whiston in a Thursday note. “But comments like this followed by actions doing the exact opposite are not good for maintaining trust with investors, especially in light of Musk’s infamous 2018 ‘funding secured’ tweet on going private which led to civil fraud charges, Musk stepping down as chairman, and an ongoing U.S. Justice Department criminal probe.”

In addition, Tesla’s 2019 annual report released Thursday showed that the Securities and Exchange Commission subpoenaed the automaker in December, asking for financial information. The report did not specify what data and financial arrangements the SEC inquired about.

Tesla did disclose in the same report that the SEC has closed an earlier investigation into predictions the company had made about production of the Model 3 vehicle. 

Here’s what else four analysts had to say about Tesla’s $2 billion common stock offering. 

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