Tesla unveiled a plan to sell up to 5 billion U.S. dollars in stock on Tuesday (local time). This is the second time in three months that the electric car company has launched a massive share sale.
Tesla announced the plan in a filing submitted to the Securities and Exchange Commission (SEC), according to a CNBC report. Ten major banks, including Goldman Sachs and Citigroup Global Markets will be responsible for the share sale. Tesla said in the filing that the shares will be sold “from time to time” and “at-the-market” prices.
The capital that would be raised through the sale of shares is expected to be used in reducing debt and expanding businesses as the move came at a time when the electric automaker is building new factories in Texas, the U.S. and Germany.
Normally, a capital raise negatively impacts the share price since it results in share dilution. Experts in and outside the finance industry, however, forecast that Tesla’s capital raise could be positive for the stock price as the company will be able to raise enough capital to get out of its debt situation.
Shares of Tesla rose 1.27% to close at 649.88 dollars on Tuesday. The market cap of the electric automaker reached 608 billion dollars.