Tesla Motors to sell additional $500 million worth of stock

Facing an array of expansion costs, electric-car maker Tesla Motors said Thursday that it is going to raise $500 million through the sale of an additional shares of common stock.

Earlier this month, Tesla reported a second-quarter loss that nearly tripled from a year earlier amid the hefty spending.

Tesla has aspirations to be a significant manufacturer of batteries, as well as introducing a third model of electric vehicle, which requires investment, about $1.5bn for this year alone, it predicts. Musk will be buying around 84,000 shares in the new offering, but the latest acquisition will actually recede its holding – he now owns 22.25 percent of the company, being its biggest single shareholder. When considering if perhaps the stock is under or overvalued, the average price target is $301.09 which is 26.4% above where the stock closed yesterday.

If all of the underwriters exercise all of their options to purchase additional shares, Tesla could make as much as $566.5 million off the sale.

Tesla Motors (NASDAQ:TSLA) last announced its quarterly earnings results on Wednesday, August 5th.

The company said in a filing that it assumed the shares would be priced at Wednesday’s closing price of $238.17. The business’s revenue for the quarter was up 39.6% compared to the same quarter previous year.

Tesla shares are up 7% so far this year, but they’ve hit a rough patch in recent weeks on concerns about the company’s performance.

Tesla’s stock is still about 70 percent higher than it was two years ago, and with a market capitalization of $31 billion is valued more than Fiat Chrysler Automobiles. The company has been rated an average of 2.73 by 15 Wall Street Analysts. The stock was sold at an average price of $264.53, for a total transaction of $396,795.00.

Tesla Motors, Inc. designs, develops, manufactures and sells electric vehicles, electric vehicle powertrain components and fixed energy storage systems.

Palo Alto-based Tesla also intends to use some of the proceeds for development and production of the company’s Model 3, the development of its Gigafactory, as well as for other general corporate purposes.

Tesla is planning to address the problem owners of its all-electric Model S in Manhattan have in trying to find a place to charge in the congested city.

The smaller, more affordable Model 3 electric vehicle will be unveiled next March and is set to rival gas-guzzling peers produced by the likes of BMW (Swiss: BMW.SW – news), Audi and Mercedes (Xetra: 710000 – news).

The company has been burning through cash as it expands its auto and energy storage businesses.