Tesla to Raise Up to $830 Million in Stock and Bond Offerings

Tesla Motors (NASDAQ: TSLA  ) -- Elon Musk's super-charged electric car company -- is making another pit stop, and asking investors to fill up its tank with cash.

On Wednesday after close of trading, Tesla issued a press release announcing plans to sell 2.7 million shares of common stock, and float $450 million worth of convertible senior notes (i.e. bonds) in a pair of underwritten public offerings. Assuming demand is strong -- as demand for the shares has been in recent weeks -- underwriters will have the option to buy an additional 405,454 shares of stock and $67.5 million in bonds.

In all, the stock and bond offerings promise to raise as much as $780 million for Tesla, before deduction of costs. A further $55 million may be raised subsequently, when Musk makes a promised purchase of Tesla stock directly from the company in a private placement -- resulting in a net cash haul for Tesla of as much as $830 million after costs. (Musk says he will also buy $45 million in stock at the offering, so in total, he will be putting another $100 million of his own money into the company he founded).

Between the stock offering, the private placement to Musk, and the convertible nature of the bond offering, these multiple cash-raising moves could dilute Tesla shareholders by as much as 9.2 million shares, or 8%. However, Tesla promised to offset the effect of the convertible note offering's dilution, at least, by "up to 100% over the offering stock price" by hedging the notes and warrants attached thereto. Tesla did not provide specific details on how it will accomplish this hedge.


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