Tesla Raises More Capital As It Prepares To Launch Model X.
“Elon Musk should sell more equity before it is too late”
Tesla Motors, surprising nobody, announced it would raise new capital by selling more shares.
The only surprise was the amount. Tesla announced it would raise about $500 million, but a day later, following a testing of the investment waters which showed great investor appetite for the deal, the company actually raked in about $642 million.
Tesla has been burning through cash as it gets ready to launch the Model X SUV this autumn, and prepares to unveil the mass market Model 3 in the first quarter of next year.
In the second quarter of 2015 Tesla lost $184 million compared with a loss of $61.9 million in the same period last year. Sales rose 24 per cent to $955 million from $769 million. Cash reserves fell to $1.15 billion on June 30, from $1.5 billion on March 31 and $1.9 billion at the end of 2014, bringing total cash burn in the first half to $755 million. Tesla cut its sales forecast for 2015 to between 50,000 and 55,000 cars. Last year it forecast 60,000 sales in 2015. Next year Tesla forecast sales of between 83,000 and 93,000.
The Financial Times Lex column is probably feeling a bit smug.
A week before Tesla’s announcement it led a column with this headline – “Elon Musk should sell more equity before it is too late”.
“Investors have remained loyal Mr Musk should take advantage of that loyalty while he still can,” Lex said.