Tesla (NASDAQ:TSLA) Needs Money Like O2, Musk Donates Big Stake
Wednesday, Tesla Motors, Inc. (NASDAQ:TSLA) announced a underwritten registered public offering of about $2-B worth of shares of its common stock to drive the ramp of the Model 3.
The fledgling EV maker is offering about $1.4-B in shares. CEO Elon Musk will sell shares to “cover tax obligations associated with his concurrent exercise of more than 5.5-M stock options.”
In a Wednesday note to clients, Goldman Sachs (NYSE:GS) estimated that the company needed to raise only $1-B to fund accelerated Model 3 production. The Goldie (Tesla’s friendly banker) said it sees a 22% upside to its 6-month price target of $250/share
Tesla said that it will use the capital to help meet the projected demand for the Model 3. As of 21 April, Elon Musk said that the company had received about 400,000 orders for the new EV, Prospective buyers have put up refundable $1,000 deposits for the to be built Model 3.
The projected demand raises Big Q’s about how the EV maker could deliver the vehicles timely. In Q-1, it delivered only 14,820 cars, falling short of analyst expectations of 16,000.
Despite this latest miss, Tesla said it still expected to deliver between 80,000 and 90,000 vehicles in Y 2016, I do not expect the company to make that projection.
Mr. Musk is a consistent unapologetic “misser”
The company said it hopes to deliver the Model 3 by the end of Y 2017 and is accelerating its 500,000-unit build target to Y 2018. Tesla previously aimed to meet this goal by Y 2020.
The company added that Mr. Musk will gift 1.2-M shares of his Tesla stock to charity in some sort of “cause marketing” scheme.
Notably, Mr. Musk’s overall stake will increase after the close of these transactions.
|HeffX-LTN Analysis for TSLA:||Overall||Short||Intermediate||Long|
|Neutral (-0.18)||Bearish (-0.46)||Neutral (-0.15)||Neutral (0.06)|
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