Tesla is set to raise over $1.15 billion from stock and convertible senior notes to help offset the risk for its Model 3 production as the company measures its business to handle its latest model’s production.
Several analysts have anticipated that the electric carmaker will pad out its balance sheet with more capital, while other analysts were expecting Tesla to seek more in order for the Model 3 production to expand.
Tesla’s Model 3 full production is set to kick-in this year, along with the pre-production last February, citing a temporary production line freeze in order to smoothen the processes at Fremont factory for the latest model.
Based on the reports, splitting the new funding initiative will see the company to pursue worth $250 million in common stock offering, with $750 million raised through convertible notes due in 2022.
During the earnings result conference in February, Musk stated that the company could finish its production preparations for Model 3 without bringing in new funds, that would send the electric carmaker “close to the edge” in terms of its overall cash position.
Vetr Inc. Lowered Tesla Inc. Rating
Vetr downgraded Tesla Inc. from a “hold” rating to a “sell” on Tuesday, citing a price target of $244.13 on the company’s stock. Meanwhile, Vetr’s target price points posted 4.54% potential downside from the previous close.
Tesla traded at 255.73 during the course of the session on Tuesday, with a 12-month low of $178.19 and a 12-month high of $287.39. The stock recorded a 50-day moving average price of $257.72 and a 200-day moving average price of $217.88, with a market capitalization of $41.34 billion.
The company last issued its quarterly reports on February 22nd, which posted an earnings per share (EPS) of $0.69 for the quarter, missing analysts’ consensus estimate of $0.43 by $0.26.
The chart below illustrates the Tesla Motor Inc. stock’s movement amid decisions of raising $1 billion funds for the Model 3 production. The stock is currently trading at 262.16 in a light trading volume of 2700, near support 259.26.
As several analysts have reiterated their rating on the stock, it is expected that shares of Tesla could consolidate. Hence, market players are recommended to still wait on the sidelines until the company’s further notice on the said production of the Model 3.
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