Elon Musk invests $100 million in his company Tesla Motors
Tesla Motors said Wednesday that founder Elon Musk would invest $100 million in the surging electric car maker, and that it would repay a loan from the US Department of Energy ahead of schedule.
The California maker of high-priced electric vehicles said it would launch a new stock offering of some 2.7 million shares along with $450 million in convertible notes to raise fresh capital.
Musk, Tesla’s chief executive and cofounder, will purchase $45 million in common shares and another $55 million in a private share placement, the company said.
Tesla said it expects to raise some $830 million and use the proceeds to prepay a loan from the US Department of Energy.
The moves came amid a stunning surge in the value of Tesla, which has just a tiny share of the US car market but turned a profit for the first time in the past quarter.
Tesla shares jumped another 1.9 percent Wednesday to $84.84, giving it a market value of $9.7 billion. With the recent gains, Tesla has become more valuable than Fiat — even though the Italian auto giant produces 200 times more cars than the American upstart.
The shares have more than doubled this year after struggling through 2012 on production delays and questions about whether it could turn a profit.
On May 8, the California-based firm announced $11 million in net income for the first quarter as revenues rose 83 percent from the prior quarter to $562 million.
Tesla cited strong global demand for its $62,000-$87,000 Model S, saying it is receiving orders at a rate of more than 20,000 per year worldwide, adding that it seen “significant upside potential in Europe and Asia.”
Although Tesla has been on the upswing, the road has grown bumpier for the electric car market.
Coda Automotive, one of what had been a promising crop of electric car startups, filed for bankruptcy protection this month, and said it would reorganize around the electric storage market.
High-end electric car maker Fisker Automotive, which has had financial woes for months, announced meanwhile it was laying off 75 percent of its workforce, raising the prospect of defaulting on US government loans.