Tesla (TSLA) increases capital raise up to $2.7 billion, now Elon Musk wants to contribute $25 million

After announcing its capital raise yesterday and testing the market, Tesla decided to increase its capital raise up to $2.7 billion and CEO Elon Musk increased his interest to contribute to $25 million.

In new filings with the SEC today, Tesla announced that it set a price for its offering of 3,086,419 to 3,549,381 shares at $243 for $737.0 million to $847.6 million in proceeds.

As part of the offering, Tesla also disclosed that Musk is interested in buying $25 million in shares:

“Mr. Elon Musk, our Chief Executive Officer, has indicated his preliminary interest in purchasing up to 102,880shares of our common stock for a purchase price of approximately $25.0 million in this offering at the public offering price.”

That’s up $15 million from the $10 million that was disclosed yesterday.

Along with the capital raise, Tesla also increased the size of the convertible notes that it is issuing to raise capital:

“Concurrently with this offering of common stock and pursuant to a separate prospectus supplement, we are offering 2.00% convertible senior notes due 2024, or the notes, to the public in an aggregate principal amount of $1.60 billion (or $1.84 billion if the underwriters for the concurrent convertible notes offering exercise in full their option to purchase additional notes).”

In total, it should net proceeds of “approximately $2.3 billion” and “up to $2.7 billion if the underwriters exercise their options in full to purchase additional common stock and notes.”

The underwriters, Goldman Sachs and Citigroup, amongst a few others, expect to deliver the shares of common stock against payment “on or about May 7, 2019”, according to the filing.

Here’s the updated filing with the SEC from Tesla:

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Electrek’s Take

This has happened virtually every time Tesla decided to do a secondary offering. They always ended increasing the size.

As I have stated many times in the past, never bet against Elon Musk’s ability to raise capital.

The increase comes after Elon said that Tesla’s value will grow 10x to $500 billion due to its self-driving tech during a conference call for investors regarding the new capital raise.

For those who believe in Tesla’s approach to self-driving, it’s a great opportunity to get a lot of money in play and it looks like many people are taking them up on the opportunity.