Musk Says Tesla, SolarCity Need Not Raise Cash This Yearby
Fundraising for Q4 2016, Q1 2017 wont be necessary, says Musk
Tweet comes as Goldman, Morgan Stanley scrap buy rating
Tesla Motors Inc. and SolarCity Corp. don’t need to raise cash this quarter as the two companies prepare for a merger, billionaire Elon Musk said.
Musk, Tesla’s chief executive officer, said in a tweet Sunday that he would “like to correct expectations that Tesla/SolarCity will need to raise equity or corp debt in Q4. Won’t be necessary for either.” In response to a tweet asking if the first quarter of 2017 was then likely, Musk replied, "Probably not then either.”
Tesla employees were told in an Aug. 29 e-mail from Musk that the carmaker needed to raise additional cash in the fourth quarter as the company ramped up production of its Model 3 sedan. Earlier this month, Tesla reported third-quarter deliveries that topped analysts’ estimates, with shipments of about 24,500 electric vehicles.
Musk proposed acquiring SolarCity in June, which was meet with market skepticism as shares plunged 10 percent the first trading day after the announcement. For SolarCity, where Musk is the chairman and the company’s largest shareholder, profits look particularly elusive, and Tesla has continually had to ask for more funding. The proposed merger could soon go to a vote before shareholders of both Tesla and SolarCity.
In a Friday filing with the Securities and Exchange Commission, Tesla said that the company’s current operations will provide “adequate liquidity” through the end of the fiscal year, but plans to raise additional funds before the year ends. The amount has not been determined, the filing said.
After topping analysts’ estimates for third-quarter deliveries, Tesla shares surged Monday by 4.7 percent, only to end the week down 3.6 percent on the heels of downgrades from two of Musk’s top bankers, Goldman Sachs Group Inc. and Morgan Stanley.
Musk also tweeted Sunday that there would be a "Tesla product unveiling on the 17th (unexpected by most),” followed by the Oct. 28 introduction of a combination of solar power, battery storage and electric-vehicle charging systems.