Tesla sold shares at steepest discount it's ever given investors

The Tesla logo

Elon Musk has US$548 million in personal loans from Morgan Stanley, Goldman Sachs Group Inc. and Bank of America Corp., according to a regulatory filing Thursday, an increase of about 8 per cent since Tesla's previous disclosure in May.

Tesla also said it expects capital expenditures to average between $2.5 billion and $3.5 billion a year in 2020 and 2021. The share price opened lower Friday, jumped as high at $812.97 and has hovered around $802. Chief Executive Elon Musk indicated "preliminary interest" in buying up to 13,037 shares in the offering, which would be valued at $10 million at the offering price, while board member Larry Ellison indicated interest in buying up to 1,303 shares for about $1 million.

Tesla says it plans to use the cash to strengthen its balance sheet and for general corporate purposes.

Elon Musk
Elon Musk

In addition to the stock offering, Tesla released its audited 2019 annual report early Thursday and disclosed that on December 4, the Securities and Exchange Commission issued a subpoena seeking information concerning "certain financial data and contracts including Tesla's regular financing arrangements". As recently as last month, Musk said: "It doesn't make sense to raise money". An institutional investor asked that given the recent run in the share price, why not raise capital now and substantially accelerate the growth in production? At that time, Musk said the company was spending money sensibly and that there is no "artificial withholding of expenses".

Tesla Inc. investors who got in on Thursday's share sale received the steepest discount the electric auto maker has offered in its 10-year history as a public company.

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