Tesla Enters Agreement to Raise $5 Billion through Common Shares Offering

by Eva Fox September 01, 2020

Tesla Enters Agreement to Raise $5 Billion through Common Shares Offering

September 1, 2020, Tesla Inc (NASDAQ: TSLA) stated it plans to raise up to $5 billion through a share sale program to be conducted by Wall Street’s main brokerages. Sales agents include major banks such as Goldman Sachs & Co, Bank of America Securities Inc, Citigroup Global Markets Inc, and Morgan Stanley & Co.

Statement from FORM 8-K:

"On September 1, 2020, Tesla, Inc. entered into an equity distribution agreement with Goldman Sachs & Co. LLC, BofA Securities, Inc., Barclays Capital Inc., Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Morgan Stanley & Co. LLC, Credit Suisse Securities (USA) LLC, SG Americas Securities, LLC, Wells Fargo Securities, LLC and BNP Paribas Securities Corp., as sales agents, to sell shares of common stock, par value $0.001 per share, of Tesla (the “Common Stock”) having aggregate sales proceeds of up to $5.0 billion (the “Shares”), from time to time, through an “at-the-market” offering program."

“We currently intend to use the net proceeds from this offering to further strengthen our balance sheet, as well as for general corporate purposes. Pending use of the proceeds as described above, we intend to invest the proceeds in highly liquid cash equivalents or United States government securities,”

Upon delivery of a placement notice and subject to the terms and conditions of the Equity Distribution Agreement, the Sales Agents will use reasonable efforts consistent with their normal trading and sales practices, applicable state and federal laws, rules and regulations, and the rules of the Nasdaq Global Select Market to sell the Shares from time to time based upon Tesla's instructions for the sales, including any price, time or size limits specified by Tesla. Under the Equity Distribution Agreement, the Sales Agents may sell the Shares by any method permitted by law, including in ordinary brokers' transactions, in negotiated transactions, in block trades, and in transactions that are deemed to be an “at-the-market offering.” The Sales Agents' obligations to sell the Shares under the Equity Distribution Agreement are subject to satisfaction of certain conditions, including customary closing conditions.

The move comes a day after a 5-for-1 stock split, Tesla's first split since its initial public offering about a decade ago. The high-flying stock has surged more than 70% since the split was announced on August 11 and was trading at over $2,000 on Friday, adjusted for the split. Tesla’s stock is among the most expensive on Wall Street.

Legal Disclaimer --

This article is for informational purposes only. You should not construe any such information or other material as an investment, financial, or other advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, or offer by Eva Fox, Tesmanian, or any third party service provider to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction.

Eva Fox holds zero share of Tesla, Inc., and currently (at the time of this article's publishing) holds zero options or securities in Tesla Inc. and/or its affiliates.

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