Tesla floats another sale of shares
Founder Musk talks of relocation from Calif.
Tesla said Tuesday that it is looking to raise up to $5 billion in capital through a stock offering. The announcement came on the same day CEO Elon Musk said he had moved his home from California to Texas.
The stock sale is the second for the electric vehicle and solar panel company in three months. In September, Tesla said it planned to sell up to $5 billion worth of common shares just one day after a 5-for-1 stock split took effect.
Musk told The Wall Street Journal in an interview Tuesday that he had moved to Texas, saying that California has taken innovators for granted.
The move could also be because Texas has no income tax. Musk’s 18 percent stake in Tesla is worth billions.
The newspaper didn’t say where he had moved in Texas, but it’s likely to be close to Austin, where Tesla is building a new factory. Spacex, another Musk-led company, has operations nearby. Musk told the newspaper he’s been working on the move for months.
Musk had threatened to relocate Tesla’s Palo Alto, California, headquarters and future manufacturing to Texas earlier this year during a high-profile spat with county officials over whether Tesla’s San Francisco Bay Area factory should stay closed because of coronavirus restrictions.
On the stock offering, Tesla Inc. said in a regulatory filing that the sales would be made “from time to time.” The stock will be sold through 10 different brokerage houses, and each will get up to a 0.25 percent commission.
Wedbush’s Daniel Ives said in a client note that the current move makes sense given the strong rally in the company’s shares and investors’ keen interest in the electric vehicle market.
Tesla’s stock has exploded this year, rising more than 600 percent. On Tuesday, it closed up 1.3 percent at $649.88.
The company has to finance some big-ticket capital spending this year because it’s building a new factory in Germany and the one outside Austin. It’s also gearing up to roll out its new “Cybertruck” pickup and a semi sometime next year.
The company posted a $331 million net profit for the July-through-september period, its fifth straight quarter of profitability. But as in previous quarters, the company relied heavily on $397 million it earned from sales of electric vehicle credits to other automakers so they can meet government fuel economy and pollution regulations.
Tesla could post its first full-year profit when it reports fourth-quarter earnings early next year.