Tesla Stock Sale Raises $738 Million

There’s a strong demand showing for Tesla Motors’ new stock, despite the fact that its existing stock has wavered. In a Securities and Exchange Commission filing this week, the luxury electric carmaker said it expects net proceeds of $738.3 million from its stock offering that closed Wednesday.

Tesla set up the stock issuance to help speed up the pace of its car development, along with its charging network and battery factory initiatives. The company explained that the underwriters of its secondary stock sale exercised their option for additional shares, boosting the proceeds to an estimated $738.3 million. Tesla sold 3.1 million shares at $242 each to give itself a cash cushion as it prepares to begin deliveries of its Model X sport utility vehicle. The smallest and youngest publicly held U.S. automaker faces major capital spending as it expands globally and builds a massive battery factory in Nevada.

On Aug. 13, Tesla announced its plans to sell 2.1 million shares, with an underwriter option to buy as many as an additional 315,000. The following day, the company increased that number to 2.69 million shares, with an option for as many as 414,239 more.

Goldman Sachs Group Inc. is buying approximately 1.18 million shares, with Morgan Stanley acquiring almost 962,000. The other underwriters are JPMorgan Chase & Co., Deutsche Bank AG, Bank of America Corp. and Wells Fargo & Co.

Tesla CEO Elon Musk is the company’s largest shareholder, with a 22 percent stake. He indicated preliminary interest in buying as many as 82,645 shares in the offering for a total of approximately $20 million, the electric carmaker said in an Aug. 14 filing.

Tesla fell 2.1 percent to $255.25 at the close in New York. The shares have gained 15 percent this year as the Standard & Poor’s 500 index rose 1 percent.

Concerns about costs and competition have weighed heavily on Tesla, which has been burning through cash in its efforts to expand. The company’s capital expenditures reached $405 million in the second quarter, and it plans to invest $1.5 billion this year.