Electric car company Tesla plans to raise $ 234 million in a combination of a follow-on offering and a private placement. On Friday morning, Tesla priced the 5.3 million shares it plans to offer for its follow-on offering (announced last week) at $ 28.76 per share, which was the closing price for Tesla shares on June 2. That price is slightly above the proposed maximum offer price of $ 26 per share in its prospectus last week.
Tesla also offered the underwriter a 30-day option to buy another 795,000 shares, and is separately selling 1.41 million shares to Tesla CEO Elon Musk, and 637,475 shares to Blackstar Investco, an affiliate of automaker and Tesla investor Daimler in a private placement. The total including the underwriter option could lead to Tesla raising $ 234 million. Musk is buying slightly fewer shares than announced last week (Tesla had announced 1.5 million shares for Musk) and Blackstar is purchasing slightly more (Tesla had announced 644,475 shares for Blackstar).
Tesla says it plans to use the proceeds to help develop its third electric car, an electric SUV vehicle called the Model X. Musk hinted on the latest quarterly earnings call last month that Tesla was considering raising more funds for the Model X project.
Tesla debuted on the Nasdaq in June 2010, at an offering price of $ 17, and ended its first day of trading up 40.5 percent to $ 23.89. It has traded around there, and above that, for months, up to $ 33 back in November. On news of the pricing of the follow-on offering and private placement Friday morning, Tesla’s shares rose to $ 30.70, the highest point in weeks.
Tesla’s latest financing move shows just how much money it takes to be a mainstream car manufacturer. In its most recent quarter, Tesla recorded revenues of $ 49.03 million, more than double its first quarter 2010 revenues of $ 20.81 million. At the same time, Tesla also lost $ 48.94 million, which was a lot bigger loss than its first quarter 2010 loss of $ 29.52 million. Tesla is in an investment and growth period as it looks to launch its Model S electric sedan in 2012, and now put more funds toward developing its Model X program.
As I reported last week, Tesla plans to end production of its first-gen electric car, the Roadster, in December 2011 to focus on building the second electric car, the Model S, and now the Model X. But there will be a significant gap between when it starts selling the Model S and X, and when it stops producing and selling the Roadster.
In combination with that gap, Tesla does “not having any signed agreements for powertrain component sales after 2011,” Tesla writes in its S1. While Tesla has been working with Toyota on developing an electric version of its SUV the RAV4 (which Toyota plans to launch in 2012), Tesla doesn’t have the production deal in the bag, and is negotiating with Toyota to finalize an agreement to supply production parts for that project. However, “no agreement has yet been executed and there are no assurances that we will be able to enter into any such agreement.”
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