Reuters
Published Dec 08, 2020 06:23AM ET
Updated Dec 08, 2020 08:40AM ET
(Reuters) -Tesla Inc unveiled a $5 billion capital raise on Tuesday, its second such move in three months as the electric-car maker cashes in on a stellar rise in its shares this year.
The company's shares touched a record high on Monday, pushing Tesla (NASDAQ:TSLA)'s market value above $600 billion and further cementing its position as the most valuable auto company in the world despite production that is a fraction of rivals such as Toyota Motor (NYSE:TM), Volkswagen (DE:VOWG_p) and General Motors (NYSE:GM).
Ten major banks, including Goldman Sachs (NYSE:GS), Citigroup (NYSE:C) Global Markets and Morgan Stanley (NYSE:MS), will conduct the sale, the carmaker said in a filing, giving no timeline for its completion. (https://
Demand for Tesla's shares has been further fueled by the decision last month to add the company to the S&P 500 index, making it one of the most valuable firms ever to join the main U.S. stock market benchmark.
Some investors and Wall Street analysts believe Tesla's stock is in a bubble, and a few have warned against adding it to the S&P 500 at current levels. Analysts' median price target on the stock stands at $400, $230 short of the current price.
The 670% rally in Tesla's shares this year has also boosted Chief Executive Officer Elon Musk's net worth from $27 billion to $155 billion, making him the world's second-richest person, according to the Bloomberg Billionaires Index.
In September, Tesla said it would raise $5 billion to ease its future debt pressures as the company seeks to massively expand production of its existing vehicles and build new factories near Berlin, Germany and Austin, Texas.
The company also has plans to launch new lines of vehicles, including a semi-truck called the Tesla Semi and its futuristic Cybertruck.
The company's shares fell 1.3% to $633.73 in premarket trading.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.