It really comes as no surprise that Tesla is, once again, raising funds. This company's announcement of a $5 billion capital raise marks the second time it has raised funds in three months, and the third time this year. With massive company growth underway across the globe, and CEO Elon Musk's recent email to employees about the importance of focusing on profits, this isn't shocking news.

Tesla's share price has been soaring as of late. This has become especially true since it was recently announced that the company would soon join the S&P 500. It makes more sense for Tesla to raise when the stock price is high, since it lowers dilution.

Tesla raised $2 billion in February 2020 and $5 billion in September 2020. According to the filing with the Securities and Exchange Commission (SEC), the newly announced $5 billion capital raise will work by selling additional shares  “from time to time” and “at-the-market” prices.

What will Tesla use the money for? Much like the previous 2020 raises, Tesla has not noted any specific use for the funds. Rather, the company will just use it to improve its balance sheet. However, we do know that the automaker is currently building multiple new factories, expanding another factory, planning battery factories, and hoping to launch a cheaper version of the Model Y, as well as its Cybertruck in the near future. The SEC filing reads:

"We currently intend to use the net proceeds from this offering to further strengthen our balance sheet, as well as for general corporate purposes. Pending use of the proceeds as described above, we intend to invest the proceeds in high-grade investments, highly liquid cash equivalents or United States government securities, subject to applicable regulatory restrictions."

Good idea? Bad idea? What will this mean for Tesla stockholders? Please provide us with your financial wisdom in the comment section below. We admit to not having much of a grasp or understanding when it comes to stock and Wall Street in general. There are plenty of financial websites that focus on such topics.

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