Tesla will raise up to $2-2.3 billion through issues of new shares and debt. Expected capital expenditures in 2019-2021 are between $6 to $8.5 billion.
Tesla needs some $2 billion of additional capital to finance its expansions after the huge $700 million in losses in the first quarter.
Funds will be raised in two ways:
- issues of new shares - up to $650 million (+15% option for underwriters)
- issues of new debt - up to $1,350 million (+ 15% option for underwriters)
- Total up to $2 billion ($2.3 billion including 15% option for underwriters)
Elon Musk himself is willing to invest around $10 million to purchase more shares, but it's just a drop in the sea of needs, which means that his share in the company will decrease.
Tesla has 2.2 billion of cash and equivalent, which is great but not enough to continue rapid expansion. Besides the new Gigafactory 3 in China, the company needs to launch the Model Y and more products after that. Capital expenditures plan is:
- 2019: $2-2.5 billion
- 2020: $2.5-3 billion
- 2021: $2.5-3 billion
Small profits (if there will be profits of course) will not enable Tesla to make the investments on its own.
Well, we are not too worried about the fundraising, as it's probably not a mystery that for Tesla the only way to go is to grow and become bigger and bigger with an entire fleet of cars, plants around the world and various product/services. Only the biggest corporations, which sell cars in millions annually, can do business in a more stable way and make regular profits.