Tesla raising $1.4 billion

Tesla announced last evening that they were raising more money, not at the discount you may expect. The first line says it all: This is a public offering of shares of common stock of Tesla Motors, Inc. The company is offering 6.8 million shares to shareholders. The Tesla document (if you read it) is a little hard to read, the WSJ do a better job than I ever would - Tesla Plans to Sell $2 Billion of Stock. Raising money to ramp up production and then Elon Musk is exercising rights (and selling to pay for tax obligations) in order to settle obligations. The quantum of which is mind blowing. He is not (repeat not) taking any money out, rather exercising rights granted in 2009 (5.77 million shares) for a mere 36.5 million Dollars.

That is still a big number, however, he needs to pay tax on it, selling 2.77 million shares to raise 566 million Dollars to pay tax. In order to take possession of shares that are worth 1.1 billion Dollars, the 5.77 million shares. The dilutionary impact I guess is there for all to see, the board way back in 2009 would have known the value of the fearless leader. And that is what you must live with as a shareholder. The net impact is that he (Musk) takes on another 3 million additional shares. I can't (or couldn't) find the exact number of shares that he now owns. A quick web search says he has 35 million shares (I am not sure whether this is before or after these new shares). On top of that, he owns 20.6 million shares of SolarCity. Nearly 30 percent of that company.

The man who never stands still in a company that never stands still. Astonishing. We stay long Tesla on a very case by case scenario.