Shares of the company are climbing in early morning trading after it detailed in a regulatory filing an offering it expects to generate about $642 million in proceeds after expenses. Shares of Tesla were up $1.99 to $244.50 in premarket trading today.
The nearly 2.7 million shares that Tesla Motors Inc. will offer could grow to more than 3 million if underwriters exercise their option to buy more shares. Tesla CEO Elon Musk said yesterday he plans to buy $20 million worth of stock, and that remains true today.
The Palo Alto, CA, automaker says it needs the cash in part to help with development of its Model 3, a lower-cost electric car due out in 2017. Tesla will also use some of the money to work on the $5-billion battery Gigafactory in Nevada. Tesla's highly anticipated third vehicle, the Model X SUV, will go on sale in September. S&P Capital IQ analyst Efraim Levy told Reuters that this new stock offering, "combined with existing credit lines, will provide the company with more than enough cash for operational purposes into 2016."
The AP contributed to this report.