Tesla Announces $250MM Common Stock, $750MM Convertible Offering, Musk Buying $25MM; Stock Surges

Tyler Durden's picture

In what will hardly come as a surprise, Tesla - which burned half a billion dollars in the fourth quarter - just announced it is raising capital in the form of a $250 million common stock and $750 million convertible offering. In addition, Tesla has granted the underwriters a 30-day option to purchase up to an additional 15% of each offering. Elon Musk will participate by purchasing $25 million of common stock. According to the press release, the aggregate gross proceeds of the offerings, including the options granted to the underwriters, is expected to be approximately $1.15 billion.

Tesla stock is, far more surprisingly, soaring on the dilution news perhaps because instead of raising the entire $1+ billion in the form of equity, TSLA managed to issue parts of it as aconvert.

Goldman, Deutsche, Citigroup and Morgan Stanley are underwriters of the offering.

Full press release below:

Tesla Announces Offerings of Common Stock and Convertible Senior Notes

LO ALTO, CA -- (Marketwired) -- 03/15/17 -- Tesla (NASDAQ: TSLA) today announced offerings of $250 million of common stock and $750 million aggregate principal amount of convertible senior notes due in 2022 in concurrent underwritten registered public offerings. In addition, Tesla has granted the underwriters a 30-day option to purchase up to an additional 15% of each offering. Elon Musk, Tesla's CEO, will participate by purchasing $25 million of common stock.

The aggregate gross proceeds of the offerings, including the options granted to the underwriters, is expected to be approximately $1.15 billion. Tesla intends to use the net proceeds from the offerings to strengthen its balance sheet and further reduce any risks associated with the rapid scaling of its business due to the launch of Model 3, as well as for general corporate purposes.

The notes in this offering will be convertible into cash and/or shares of Tesla's common stock at Tesla's election. The interest rate, conversion price and other terms of the notes are to be determined. With respect to the notes, Tesla intends to enter into convertible note hedge transactions and warrant transactions to limit dilution of its common stock. In connection with establishing their initial hedge of the convertible note hedge and warrant transactions, the hedge counterparties or their affiliates expect to enter into various derivative transactions with respect to Tesla's common stock concurrently with or shortly after the pricing of the notes, including with certain investors in the notes.

Goldman, Sachs & Co., Deutsche Bank Securities, Citigroup and Morgan Stanley are acting as lead joint book-running managers for the offering, with Barclays, BofA Merrill Lynch and Credit Suisse acting as additional book-running managers.

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Croesus's picture

Hahahaha..."Crap For Sale"..."Buy Some Shares of Crap For Sale"...

Looney's picture


Teslas are just pimped-up golf carts.  ;-)


The_Juggernaut's picture

There's a Tesla investor born every minute

American Psycho's picture

Musk buying with taxpayers' money.  Give me some of your money and I'll buy some shares too.

jcaz's picture

Pfft- doesn't really matter if it's convertible or common, dilution is dilution-  any other stock would be down 10% on this news, but this freak show/ quasi government holding keeps pumping.....  Kiss my $250 puts buh-bye......

Mr. Universe's picture

What's not to love? The members of the club can pump this bitch up as much as they want. Worthless company? Buy it with worthless FIAT. The only people that really lose are those at the bottom, that's where the real shit trickles down. This world is lost because they are never going to give up their system until everything is in ruins. Trump draining the swamp? It's tough when they bind you up and throw you into the snake pit. I wouldn't know who to trust, do you? Even your suck up son-in-law could be selling you out and you wouldn't know Yaakov. Oohh look Ivanka is so pretty. No, I'm sorry but the Orange Jesus is in over his head this time and they will bring him down unless what is left of the good guys can rally around him and the constitution. Good luck with that.

8774_44887's picture

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... http://bit.ly/2jdTzrM

nuubee's picture

Elon Musk and Tesla are offering stock when they've been running in the red for years...

Ex-Oligarch's picture

A friend of mine bought a Tesla, and it is one sweetly appointed, comfortable set of wheels.

On the other hand, it's a time-consuming and expensive pain to recharge from the garage of his coastal condo, and the charging spot at his work is usually in use by somebody else, so he routinely drives about 5 miles inland from his swank beach town to the closest business that does quick charges.  It's located next to the freeway, near the carcass of a former mini-golf course and a struggling bargain motel  There the wealthy Tesla owners sit around for hours in the dumpy lobby drinking bad coffee and waiting to get their cars back.

Croesus's picture

That's just wrong...but then, the Chosenites are just as deranged with their cutting and sucking of 8-day old baby dicks.

Mr. Universe's picture

First off, how a father could do that to her daughter. It should be an inconceivable heinous crime requiring the same for DAD, with dull scissors of course, followed by a lifetime of servicing Bubba at the big house.  Instead, he is deported, where he most likely will hop a boat to the EU to continue his worship of Allah.

JuliaS's picture

Just like Tony Stark, Musk is a fictional billionaire.

TheRideNeverEnds's picture

More stock for sale = moar bullish

Buy it now while it's still on sale!!!1

Mr. Schmilkies's picture

Tesla burning a lot of stuff lately, not just cash.

spicedune's picture

The BS pushed on us is coming from all sides www.inflation.co

krispkritter's picture

Rather than having to send SPAM comments via email(I've sent dozens to abuse@zerohedge.com), Tyler just needs to add a 'SPAM' link/button on the post and once it passes a certain threshold, drop it from the thread entirely.  The criteria should be inclusion of a link and the threshold value.

bamawatson's picture

hire that man tyler
or at least listen to him

L Bean's picture

Tesla Convertible, sweet! 

TeethVillage88s's picture

But they don't make Money!

They are a Govt Agency!

trillion_dollar_deficit's picture

So this will last them what a quarter maybe? Quarter and a half?

scv's picture

broke AF. more numbers to cover up the cooking

MsCreant's picture

So pump and dump, is that a sex act or something you do with stocks?

krispkritter's picture

Depends on how much you're willing to spend...chances are good you're going to get fucked either way.

scv's picture

musk is a COMPLETE FUCKING fake. the dumbest mother fucker you ever heard talk. nikola tesla would be beat this guy with a bat.

~flic explains fake america:


L Bean's picture

Werner Herzog SKEWERED Musk in his doc "Lo And Behold". Musk thought he was being interviewed for his brilliance but it's clear vis a vis Herzog's documentary style that the sum of all of his segments was pure lampoonery. The Mars stuff is hilarious, and brutal I think..


And the idiots in the comments think it makes him look good.  It's almost as if some sort of mass-brain damage event has happened.

Ex-Oligarch's picture

"mass-brain damage event" = the american educational system

krispkritter's picture

A session of Congress?  I mean what do you call a gathering of baboons?

Hongcha's picture

I viewed the clip and have to disagree.  He is speculating, which is perfectly legit in that area of work.  That I personally find the speculation unlikely to unfold, is beside the point.  He doesn't look foolish but I do think Herzog sounds condescending here.

L Bean's picture

Watch the whole film. It gets progressively more condescending, and he uses a sober, thoughtful astronomer to counterpoint Musk's rambling fantasy scenario.

The_Juggernaut's picture

Wouldn't it make more sense to reinvest their profits?

JTimchenko's picture

Anyone familiar with the techniques used by the bankster underwriters will know NOT to buy this offering until after about 1-2 months from now. Why? Because, as in the novel "The Synod" these crooks repeat the same crooked act everytime. Then, rinse and repeat. They are supporting the price and causing it to "soar" by market manipulation, and will pay themselves back later, by using the overallotment options. It is actually disclosed in the prospectus as so-called "pricing support", and amazingly, it is legal. The net effect, however, is that the price of the stock will plummet around 1 month from now. If you like Tesla, wait until then to buy. I am sure, I might add, that Mr. Musk did NOT pay the current manipulated price.

cowdiddly's picture

what a con artist.

desertboy's picture

The more they can kick the can down the road, the more institutional investors they can bring on, the less it matters that there is no profit. 

pliny the longer's picture

Musk CIA buying $25 MM


there, fixed it for u 

pliny the longer's picture

Musk CIA buying $25 MM


there, fixed it for u 

Friedrich not Salma's picture

Step right up, folks! Don't be shy! Be prepared to witness the whimsical, the outlandish, the macabre, and the beautiful! Hurry, hurry, hurry!

U4 eee aaa's picture

So is it time to officially short this bleeding carcass

affirmed_78's picture

Wait until after model 3 launches and people realize this pig is never gonna make a dime.  The ultimate sell the news event.

guardyernuts's picture

Soon. I see Fido is offering shares of the secondary to it's retail muppets, in 50-share increments.  Sure sign that the top is no more than a quarter away.

affirmed_78's picture

If only they could have raised $2B to burn instead of just $1B.  $300 here we come!