Tesla plans to raise another $5 billion as value soars above $600 billion
Tesla could end the year with $20 billion in the bank. …
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Tesla is planning to raise another $5 billion from Wall Street, the company announced in a Tuesday morning filing with the Securities and Exchange Commission. It will be the company’s third round of fundraising this year and will bring its 2020 fundraising to $12 billion.
It’s a good time for Tesla to raise money because Tesla’s stock price hit a record high of $640 on Tuesday—a more than seven-fold increase since the start of 2020. Tesla’s market capitalization is now around $600 billion, which means that Tesla’s existing shareholders will give up less than 1 percent of their stake from the stock sale.
Still, investors didn’t seem thrilled at the news, with Tesla’s share price down a little more than 1 percent in morning trading.
In previous years, Tesla was perpetually short of funds and needed to sell stock to stave off bankruptcy. That’s no longer the case. Tesla’s most recent financial disclosure showed the company with almost $15 billion cash in the bank. Tesla is likely to end the calendar year with a $20 billion war chest. That’s plenty of money even in the capital-intensive automotive industry.
The big question now is how Tesla is going to spend all of that cash to boost output and justify Tesla’s astronomical valuation. Tesla’s $600 billion valuation makes it almost three times as valuable as Toyota and nearly 10 times as valuable as GM. Yet Toyota and GM ship an order of magnitude more cars each
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