Tesla shares rise after expanding stock offering
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(Bloomberg) -- Shares in Tesla Motors Inc., the electric-car maker led by Elon Musk, today rose nearly 3 percent after the company expanded a stock offering.
Tesla rose 2.8 percent to close at $29.28 for the day. The company said in a regulatory filing today that it expects to sell 6.93 million additional shares at $28.25 each, an increase of 2.58 million from what it reported in a Sept. 25 filing. The earlier filing didn't list a price.
The company said it expects to receive net proceeds of $192.7 million, or $221.6 million if the underwriter, Goldman Sachs Group Inc., exercises its option to purchase additional shares in full. CEO Musk, who this week lowered the output forecast for the Model S sedan, said he will purchase as many as 35,398 shares at a price of about $1 million.
"The quality and reviews of the Model S, the existence of a multiple stage product plan beyond the Model S and Model X, and the quality of the operation is behind the support for the stock," said Alan Baum, principal of auto-industry forecaster Baum & Associates in suburban Detroit.
Tesla expects to deliver 200 to 225 Model S cars in the third quarter and 2,500 to 3,000 in the fourth. The company's previous forecast was for 5,000 Model S deliveries this year. Tesla is counting on demand for the Model S, which has a starting price of $57,400, to help the automaker earn its first quarterly profit. The Model X is a sport-utility vehicle planned for 2014.
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