Tesla Softens Capital-Raise Language in SolarCity Filing

  • Electric-car maker had planned to raise funds, now ‘may’ do so
  • Update to SEC document reflects Musk’s comments on Twitter

Tesla Motors Inc., working to merge with SolarCity Corp., said in a filing that it “may” raise funds, which is a step back from late August when the company said it was “planning” to go to capital markets for more cash. 

The change in language came in a regulatory filing, affirming what Tesla Chief Executive Officer Elon Musk said over the weekend when he tweeted that neither the electric-car maker nor the solar-panel company would raise money in the fourth quarter and probably not in the first three months of 2017.

Tesla did not say why it no longer needs to raise cash by the end of the year. Strong sales may help. Earlier this month, the Palo Alto, California-based automaker said it delivered about 24,500 Model S sedans and Model X sport utility vehicles in the third quarter, beating analysts’ estimates.

In a previous filing, SolarCity said that it was getting closer to breaching its debt covenants and could do so if it were unable to adjust its operating plan.

Merger Critics

Musk, who is chairman and the largest shareholder of both companies, is trying to unite them in a plan to provide clean energy and transportation under the Tesla brand. But the effort has drawn criticism over the closeness of the two companies and because the solar-panel company is projected to lose money for at least two more years.

Tesla said in a filing last week that it faces seven lawsuits accusing the board of breaching its fiduciary duties and acting for the benefit of Musk over other shareholders. Previous filings listed four lawsuits from shareholders who oppose the merger.

Tesla shares fell as much as 1.3 percent after trading above yesterday’s close early in the session. The shares were down 0.5 percent to $200.03 at 11:39 a.m. New York time, a smaller decline than the Nasdaq index’s 1.2 percent decline. SolarCity rose 0.3 percent to $19.64. Tesla shares had fallen 16 percent this year through Monday.

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