Tesla Rises After Expanding Stock Offering
Tesla Motors Inc., the electric-car maker led by Elon Musk, gained 2.8 percent after expanding a stock offering.
Tesla rose to $29.28 at the close in New York after reaching $29.89 earlier. The company, based in Palo Alto, California, said in a regulatory filing today that it expects to sell 6.93 million additional shares at $28.25 each, an increase of 2.58 million from what it reported in a Sept. 25 filing. The earlier filing didn’t list a price.
The company said it expects to receive net proceeds of $192.7 million, or $221.6 million if the underwriter, Goldman Sachs Group Inc. (GS), exercises its option to purchase additional shares in full. Chief Executive Officer Musk, who this week lowered the output forecast for the Model S sedan, said he will purchase as many as 35,398 shares at a price of about $1 million.
“The quality and reviews of the Model S, the existence of a multiple stage product plan beyond the Model S and Model X, and the quality of the operation is behind the support for the stock,” said Alan Baum, principal of auto-industry forecaster Baum & Associates in West Bloomfield, Michigan.
Tesla (TSLA) expects to deliver 200 to 225 Model S cars in the third quarter and 2,500 to 3,000 in the fourth. The company’s previous forecast was for 5,000 Model S deliveries this year. Tesla is counting on demand for the Model S, which has a starting price of $57,400, to help the automaker earn its first quarterly profit. The Model X is a sport-utility vehicle planned for 2014.
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