Tesla shares drop after automaker announces $2B stock sale
DETROIT — Shares of Tesla Inc. fell just over 4% in early trading Thursday after the electric vehicle and solar panel maker announced it would sell more than $2 billion worth of additional shares.
The move comes just two weeks after CEO Elon Musk said the company had enough cash to fund its capital programs and it didn’t need to raise any more money.
Tesla says in a statement that underwriters of the share sale have a 30-day option to buy another $300 million in common stock.
In the statement, Tesla says Musk will buy $10 million worth of the stock while billionaire board member and Oracle co-founder Larry Ellison will buy shares worth $1 million.
The Palo Alto, California-based company will use the proceeds to strengthen its balance sheet and for general corporate purposes.