Tesla Selling $642 Million in New Stock, Elon Musk to Buy $20 Million in Tesla Stock

After announcing plans to issue $500 million in common stock on Thursday, Tesla upped the size of its offering by more than $140 million Friday morning. The electric car manufacturer will now sell approximately 2.69 million shares, which is a significant increase from the 2.1 million shares revealed yesterday. In a regulatory filing on Friday, the company noted the maximum offering price was $242 per share, which would raise around $642 million.

In total, the offering could bring in up to $750 million for Tesla, as underwriters — including major players such as Morgan Stanley, Goldman Sachs Group Inc., Deutsche Bank, and JPMorgan Chase & Co. — were given the option to purchase an additional 404,239 shares. The company noted that Chief Executive Officer Elon Musk plans to purchase around 82,645 shares for approximately $20 million. In total, Tesla has raised more than $4 billion since 2013, according to Fortune.com, and the company’s latest efforts to boost capital might indicate that expansion is pricier than originally anticipated.

“Tesla intends to use the net proceeds from this offering to accelerate the growth of its business in the United States and internationally, including the growth of its stores, service centers, Supercharger network, and the Tesla Energy business, and for the development and production of Model 3, the development of the Tesla Gigafactory, and other general corporate purposes,” the company said in a statement.

Related: Financing a 2017 Tesla Model 3 Will Cost You $519 Every Month

Tesla Stock on the Rise

On Friday morning, Tesla stock was up 0.7 percent in premarket trading, totaling $244.10 per share. Shares have increased a total of 9 percent in 2015 through Thursday’s announcement; however, the company’s stock took a tumble recently, dropping approximately 10 percent since Aug. 5 when Tesla announced its second-quarter results.

Musk has been vocal about the company’s need for capital and its current absence of profitability. Ramping up production levels to fuel future plans for growth requires billions of dollars and patience from investors.

At an auto industry event in January, Musk said Tesla might finally turn a profit on a net basis by 2020 when annual sales of the company’s sleek electric cars reach 500,000. The company expects to sell fewer than 55,000 cars this year.

Big Changes on the Horizon for Tesla Motors

Tesla is currently developing a seven-seat SUV that is expected to hit the market in early 2016. Reservations for the Tesla Model X are currently being accepted with a $5,000 payment.

The company’s Model 3 vehicle is slated to hit the market in 2017 and is primed for luxury appeal, competing with the likes of BMW’s 3 Series sedans. Tesla is already accepting reservations for the electric sedan for $2,500, promising up to 300 miles per charge.

In early August, a Reuters report claimed the company is losing more than $4,000 on every Model S sedan sold. A Tesla representative responded to the article in an email saying “new model development financing for traditional [carmakers] is very different,” and that “Model X investment peaked in Q2 and Q3 due to prototyping, lots of engineering design and testing by suppliers and our validation, crash testing and reliability testing.”

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