Tesla seeking $2B from new round of fundraising by Drew Johnson
After a rough first quarter, Tesla is running low on cash.
Following a disappointing first quarter, Tesla has announced a new round of fundraising that it hopes will generate $2 billion in cash for the company.
Tesla revealed in a Thursday filing that it intends to raise $1.35 billion through bond offerings, plus another $650 million through a stock offering. If the underwriting banks exercise their option to purchase additional securities, Tesla could come away with as much as $2.3 billion in new capital, according to Bloomberg.
Tesla's cash balance dropped to $2.2 billion after a brutal first quarter. Tesla posted a $703 million loss during the period on slacking demand and debt payments. Following the announcement of its quarterly results, analysts predicted Tesla would need to raise about $2 billion to cover future costs, including the development of the Model Y SUV.
The latest round of fundraising is seen as somewhat of a black eye for Tesla CEO Elon Musk. The 47-year-old executive stated several times last year that, after the launch of the mass-market Model 3, Tesla would no longer need to raise outside capital. However, Tesla is still experiencing growing pains in its ramp-up to becoming a full-line automaker, and further fundraising can't be ruled out.