Electric car company Tesla Motors has priced its follow-on offering of 5,300,000 shares of stock at $28.76 per share, the closing price for Tesla shares on June 2. Tesla CEO Elon Musk also plans to purchase 1,416,000 shares of stock directly from Tesla at the public offering price and Blackstar Investco, an affiliate of Daimler AG (a Tesla investor), plans to purchase up to 637,475 shares of stock directly from Tesla at the public offering price. Tesla has also granted the underwriter a 30-day option to purchase up to an additional 795,000 shares of stock. Excluding the underwriter option, Tesla will raise around $211 million in this follow-on offering.
This money is primarily going towards the development of its Model X crossover vehicle, says Tesla The Model X will be Tesla’s first SUV, and will cost around $30,000. Musk has said that this car, which is expected to become available in 2013, will be appeal to mainstream car buyers because of its lower price point.
Currently Tesla offers a sports car, the Roadster, and in 2012 its sedan vehicle, the Model S, will go on sale to the public.
Tesla shares started trading on the NASDAQ last June at around $19 per share. Shares over the past year have performed moderately well of late—the high has been around $36.42 and currently Tesla is trading at $28.76.
While secondary offerings take place often with public companies, there are a few questions that are raised with this offering. First, will Tesla tap the public markets every time they want to develop a new vehicle? Second, Musk continues to bankroll Tesla. Through the private placement, he’s putting nearly $41 million towards the development of the Model X.
Tesla Motors, founded by Elon Musk, Marc Tarpenning and Martin Eberhard, is a company that produces a high-performance electric sports car, and is backed by a number of high-profile investors. Introduced in June 2006 to the public complete with a test drive by California Governor Arnold Schwarzenegger, the Tesla Roadster is able to go from 0 to 60 in less than 4 seconds (competitive with Porsche and Lamborghini models), while also delivering 100 miles per gallon (double the...