Can Tesla Stock Withstand a Secondary Share Sale?

PALO ALTO, Calif-Tesla Motors Inc. has announced its intent to offer approximately US$500 million of additional shares of common stock in an underwritten registered public offering.

Tesla shareholders, however, have seemed willing to go along with nearly anything the company does over the last several years, and with Elon Musk putting $20 million of his own dollars into this offering, the market has so far responded positively. Deutsche Bank reaffirmed a hold rating and set a $280.00 price objective on shares of Tesla Motors in a research note on Monday, August 3rd.

Tesla Motors (NASDAQ:TSLA) was upgraded by equities researchers at Vetr from a “hold” rating to a “buy” rating in a research note issued to investors on Monday, MarketBeat Ratings reports. The stock is expected to be priced after the market closes. The fact that the company continues to spend more than what it is generates is a point of concern for the Street.

Electric vehicle maker Tesla Motors Inc.

The organization has partnered around two dozen garages in Manhattan which provide quicker, 240-volt chargers for Tesla vehicle owners to power up their vehicles. Tesla Motors has a 12 month low of $181.40 and a 12 month high of $291.42.

Tesla’s cash burn in the first half of this year was over $1.1 billion made up of about $300 million in negative operating cash flows and capital expenditures of over $800 million.

The company said in a filing that it assumed the shares would be priced at Wednesday’s closing price of $238.17. The company earned $1.20 billion during the quarter, compared to analysts’ expectations of $1.16 billion.

Tesla already manufactures a Model S (Other OTC: UBGXF – news) vehicle, which in the UK sells for just shy of £50,000, though a £5,000 rebate is available from the Government under a scheme aimed at encouraging take-up of electric vehicles. The business’s revenue for the quarter was up 39.6% compared to the same quarter a year ago. Its products comprise Model S and The Tesla Roadster. The Company uses energy management technologies and develops stationary energy storage products for use in homes, commercial sites and utilities and manufacturing processes developed because of its vehicle powertrain systems.

But Tesla also increased spending on its Fremont, California, factory, which makes the Model X, and on its battery plant, which is under construction in Nevada.

A Tesla spokeswoman, Alexis Georgeson, said that the company was trying to meet the needs of urban customers as well as travelers to urban areas by setting up convenient charging networks.