Tesla Plans To Call For A $2 Billion Investment From Investors

Indira Datta - May 16, 2019


Tesla Plans To Call For A $2 Billion Investment From Investors

Tesla announced that they are planning to call for an additional $2 billion investment from investors this year, easing market fears about the company's liquidity.

On May 3, Tesla, one of the leading electric car manufacturers on the market, announced its plan to raise $2 billion in investments, easing the fears of the market about the firm's liquidity.

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Tesla is expected to need more investments in the future.

CNBC reported that besides an additional $2 billion from investors, the company CEO Elon Musk is also going to put in $10 million as a personal investment. According to this year's first quarter record, Tesla spent nearly $2 billion in cash and reported a loss of $700 million.

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Tesla called for increased capital investment because of fear of liquidity

Earlier this month, at the meeting with many investors, when being asked about his plan to raise additional capital for the company, Musk had been non-committal. He said:

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Tesla's shares fell short after the plan was first announced. However, they quickly rose again when the company released details of the plan. Tesla is aiming for $650 mil in new equity investment and $1.35 bn from convertible notes. Besides, 10 million from the total investment will come from the CEO himself.

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The capital raising plan of Tesla helped increase its stock price on the market.

Dan Ives, Wedbush Securities' managing director of equity research, said to CNBC in an interview:

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