Tesla CEO Elon Musk Moves To Texas; Seeks To Sell $5B In Stock
(CBSDFW.COM/AP) - Tesla said Tuesday, Dec. 8, it is looking to raise up to $5 billion in capital through a stock offering.
The announcement came on the same day CEO Elon Musk said he has moved his home to Texas from California.
The stock sale is the second for the electric-vehicle and solar-panel company in three months.
In September, Tesla said it planned to sell up to $5 billion worth of common shares just one day after a 5-for-1 stock split took effect.
Musk told The Wall Street Journal in an interview Tuesday that he has moved to Texas, saying that California has taken innovators for granted.
He also could be moving because Texas has no income tax.
Musk's 18% stake in Tesla is worth billions.
The newspaper didn't say where he had moved in Texas, but it's likely to be close to Austin, where Tesla is building a new factory. SpaceX, another Musk-led company, has operations nearby. Musk told the newspaper he's been working on the move for months.
Musk had threatened to relocate Tesla's Palo Alto, California, headquarters and future manufacturing to Texas earlier this year during a high-profile spat with county officials over whether Tesla's San Francisco Bay Area factory should stay closed due to coronavirus restrictions.
On the stock offering, Tesla Inc. said in a regulatory filing that the sales would be made "from time to time." The stock will be sold through 10 different brokerage houses, and each will get up to a 0.25% commission.
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Wedbush's Daniel Ives said in a client note that the current move makes sense given the strong rally in the company's shares and investors' keen interest in the electric vehicle market.
Tesla's stock has exploded this year, rising more than 600%. It closed Tuesday up 1.3% at $649.88.
The company has to finance some big-ticket capital spending this year because it's building a new factory in Germany and outside of Austin. It's also gearing up to roll out its new "Cybertruck" pickup and a semi sometime next year.
The company posted a $331 million net profit for the July through September period, its fifth straight quarter of profitability. But as in previous quarters, the company relied heavily on $397 million it earned from selling electric vehicle credits to other automakers so they can meet government fuel economy and pollution regulations.
Tesla could post its first full-year profit when it reports fourth-quarter earnings early next year.
(© Copyright 2020 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.)
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