Shares in Tesla rose this afternoon after the electric car maker said it would raise roughly $2bn (£1.5bn) by issuing new stock.
Idiosyncratic chief executive Elon Musk will personally purchase up to $10m of shares in the new offering, while Oracle founder Larry Ellison, who sits on Tesla’s board of directors, will also buy up to £1m of stock.
Tesla said it would also grant the underwriters a 30-day option to purchase up to $300m in additional shares.
It follows a bullish period for Tesla shares which have pushed the company’s market capitalisation past the $100bn mark, making it the world’s second most valuable car manufacturer behind Toyota.
However, shares were down as much as six per cent in pre-market trading, but recovered to rise roughly five percent.
Earlier today the company said it was recalling 15,000 Model X vehicles due to a potential problem with its power steering.
Tesla said it will use the proceeds of the offering to further strengthen its balance sheet, as well as for “general corporate purposes”.
The raise comes just two weeks after Musk said Tesla did not plan to raise capital on the back of the share price surge, saying: “It doesn’t make sense to raise money because we expect to generate cash despite this growth level.”
Tesla is the largest short in the domestic market, and its meteoric rise has caused a major headache for investors betting against the tech firm.
However, the growth was stalled last week amid fears that the coronavirus outbreak will delay the timeline for Tesla’s new vehicle deliveries in China.
Goldman Sachs and Morgan Stanley are acting as lead joint book-running managers for the offering.