Californian car maker Tesla has hit a new record in value after it announced it will raise $US5 billion ($A6.75 billion) in its second stock sell-off in three months.
While share values took an initial dip after the announcement, investors quickly rallied again to buy stock as Tesla- now the 6th most valuable company in the US – prepares to join the prestigious Dow Jones S&P500 index in late December.
In a statement submitted to the SEC on Tuesday (US time), the company announced it would direct various banks and firms to act as sales agents to sell stock on its behalf from “time to time” and for “at-the-market” prices.
Tesla shares closed at $US649.88 ($A877.52) on Tuesday, having increased by almost sevenfold since the start of 2020. The company is now worth $US616.02 billion ($A831.80 billion) by market cap.
Its growth continues to surge, apparently driven by the future prospects of numerous projects including new factories in Austin, Texas and Berlin, Germany, subscription revenues, the advent of autonomous driving and plans for electric vehicle battery manufacturing.
At the company’s third quarter 2020 earnings in October, investors were informed that Tesla had plans to spend $US2.5 billion ($A3.38 billion) in 2021 and 2022 towards its new projects.
“We’re trying to spend money at the fastest rate that we can possibly spend it and not waste it,” Tesla CEO Elon Musk said during call. “That’s our current plan. e just try to spend money as quickly as possible in a way that is sensible and yields more value than it costs.”
Expansion plans in the pipeline saw Tesla’s operating expenses balloon by 33% in Q3 2020 compared to the previous quarter.
Wedbush analyst Dan Ives said the capital raise is a “clear positive” and that it further solidifies the bull case for Tesla, as reported by MarketWatch.
Goldman Sachs, Deutsche Bank, Morgan Stanley, Credit Suisse, Barclays, BNP Paribas, BofA Securities, SG Americas Securities, Wells Fargo Securities and Citigroup have been chosen to act as agents for the new share sell-off.
The new filing comes just months after Tesla announced it would take advantage of a surge in market value to raise $US5 billion in September after it split its stock five-to-one.
Tesla is the most valuable car manufacturing company in the world, having surpassed that of Toyota as investors anticipated Battery Day news.
On Friday, Morgan Stanley dubbed Tesla’s domination of the US EV market, where it sells 4 out of every 5 electric cars – with 70% of those now estimated to be its new Model Y – as indicative of the “last days of the ICE age“.
Bridie Schmidt is associate editor for The Driven, sister site of Renew Economy. She has been writing about electric vehicles since 2018, and has a keen interest in the role that zero-emissions transport has to play in sustainability. She has participated in podcasts such as Download This Show with Marc Fennell and Shirtloads of Science with Karl Kruszelnicki and is co-organiser of the Northern Rivers Electric Vehicle Forum. Bridie also owns a Tesla Model Y and has it available for hire on evee.com.au.