Tesla Launches Ridiculously Low Range Model 3 In Canada

Tesla Launches Ridiculously Low Range Model 3 In Canada

Tesla said on Thursday that it would be looking to raise as much as US$2.3 billion through offering common stock and convertible bonds in a move that analysts describe as "net positive" and probably long overdue. Shares in Tesla finished the day 4.3 per cent, or $10.09, higher at $244.10 in NY last night, valuing the company at $42.40 billion. Tesla shares rose 1.3 percent to $247.38 at 4:36 a.m.in NY in pre-market trading. The company's announcement today comes about a week after Musk said during the first-quarter earnings conference call, "I don't think raising capital should be substitute for making the company operate more effectively".

Tesla's shares had lost 30 percent of their value so far in 2019, as of May 1, giving the company a market capitalization of $41 billion. The company plans for a $1.35 billion investment from convertible notes and $650 million in new equity investment, $10 million of which will come from Musk.

The right-hand drive Tesla Model 3 configurator has opened with the full range of options, including rear- and all-wheel drive variants and ranges.

In recent months, Tesla has not sold enough cars to cover its operating expenses. An infusion of that amount would get Tesla closer to a ratio of 15 percent of cash to sales, a historical level among traditional auto manufacturers and suppliers, according to Bloomberg Intelligence analyst Joel Levington.

The company said things cost it $188 million during this quarter, such as a reduction for gains in return rates and buy back warranty plans. Still, having only $2.2 billion in the bank is a precarious situation for a company that has been known to lose more than $700 million in a single quarter.

Doing what Ross Gerber (and others) expected, Tesla has announced it is raising approximately $2 billion to boost its balance sheet. Tesla has issued convertible notes several times in the past. LLC and Citigroup are acting as lead joint book-running managers for the offering, with BofA Merrill Lynch, Deutsche Bank Securities, Morgan Stanley and Credit Suisse acting as additional book-running managers, and Societe Generale and Wells Fargo Securities acting as co-managers.

Shares of Tesla Inc. closed Thursday up 4.3% at $244.10.

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