SEC commissioner isn’t happy about settlement with Elon Musk

SEC commissioner isn’t happy about settlement with Elon Musk

Defeat, however, isn’t an option for the electric vehicle giant as it offers a glimmer of hope via an SEC filing affirming it will make public 2.7 million shares-worth $642.3 million-and offer $1.35 billion in convertible senior notes, to buoy the company’s reserves.

Tesla Inc will raise up to $2.3 billion in new capital, renouncing what Elon Musk called a “Spartan diet” and easing Wall Street concerns about the money-losing company’s ability to overcome a drop in sales and build new product lines.

However, Tesla investors appeared to welcome news of the fundraising yesterday.

Analysts have been predicting for several months that Tesla will have to raise funds to finance its expansion plans, including the construction of a Shanghai plant, the launch of a new SUV Model Y and other projects.

Tesla boss Elon Musk personally owes $507m (£389m) to the Wall Street banks helping the electric vehicle firm raise up to $2.3bn, it emerged yesterday. Articles appear on euronews.com for a limited time. At the end of the first quarter, the company had cash reserves of United States dollars 2.2 billion. “We expect that it will be a major challenge for Tesla to aggressively increase production/deliveries, shift the product mix toward the $42,000 price level, and simultaneously lower costs enough to achieve the 25% gross margin target”.

Musk cautioned earlier this season which Tesla likely wouldn’t turn a profit in the first quarter, reversing his previous forecast.

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A week after posting a huge first-quarter loss and saying the company needs to raise cash, Tesla is doing just that. The securities are being marketed with a coupon of between 1.5 percent and 2 percent, according to people with knowledge of the matter.

The notes in this offering will be convertible into cash and/or shares of Tesla’s common stock at Tesla’s election. Only one of the convertibles it or its Solar City unit have issued has met the terms for conversion.

Last week, Tesla reported its cash balance at the end of the first quarter shrunk by $1.5 billion since December, to $2.2 billion.

“As far as Tesla is concerned, the more money in the bank, the better”.

The logo of Tesla is seen in Taipei October 7, 2017.





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