Tesla has found a way to curb its stock gains. And make money on itSeptember 4, 2020
The company will sell additional securities worth $ 5 billion
Since the beginning of the year, the value of Tesla shares has increased approximately fivefold, making Elon Musk the third richest person in the world. On Monday, the securities reached a price of $ 500 per share, and this despite the fact that the company has divided the old shares into five new ones.
Looks like Tesla found a way to capitalize on this situation.
This will be the second public offering since the beginning of the year, with Tesla raising $ 2 billion in February. According to the latest quarterly report, the automaker now has 8.6 billion in free funds. Thus, there is simply no need to attract another 5 billion.
Analysts suggest that the placement of additional shares on the exchange has a different purpose. By selling securities, Tesla can hold back their growth. The rapid growth of quotations, not supported by the value of real assets, can lead to the formation of a “bubble”, which sooner or later bursts, after which there is a collapse in stock prices.
To prevent this from happening, Tesla will preemptively sell paper, driving down prices. Musk himself called the stock price overvalued in the spring, and since then they have risen in price by another two and a half times.
The very appearance of the news that the company will issue additional shares has already led to a decline in quotations. On Tuesday, the paper fell 4.7%.
It is possible that the attraction of additional funds will inspire Tesla to accelerate the implementation of its new projects. The company continues to complete the construction of a plant in Shanghai and builds facilities in Berlin and Texas. Tesla is also rumored to be considering building factories in the UK, Oklahoma and South Korea or Japan. Earlier, Musk said that he would not start new projects until the completion of already launched construction projects. But with additional money, he can reconsider his decision.
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