CEO Elon Musk Has $100M Worth of Faith in Tesla

by Christopher Freeburn | May 16, 2013 10:33 am

CEO Elon Musk Has $100M Worth of Faith in Tesla

tesla model s 630 300x236 CEO Elon Musk Has $100M Worth of Faith in Tesla[1]Shares Tesla Motors (NASDAQ:TSLA[2]) surged about 6% in Thursday morning trading after the company said it will issue new stock and convertible notes[3] to raise additional capital.

The luxury electric car maker will issue 2.7 million shares of common stock. Co-founder and CEO Elon Musk will purchase $100 million in new shares from the company. Additionally, Tesla will issue convertible notes valued at $450 million, USA TODAY noted.

Together, the new stock and notes are expected to raise $830 million for the company. The company indicated that proceeds from the issuance will be used both for general purposes and to help repay the $465 million in loans it received from the Department of Energy.

Tesla said Musk will purchase $45 million in new shares during a public offering. He will acquire an additional $55 million in shares at a private placement.

Recently, Tesla announced that it would repay its federal loans five years ahead of schedule[4].

Last month, the company said it would post its first quarterly profit[5] due to higher-than-expected sales of its Model S cars.

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2011/08/tesla_model_s_630.jpg
  2. TSLA: http://studio-5.financialcontent.com/investplace/quote?Symbol=TSLA
  3. it will issue new stock and convertible notes: http://www.usatoday.com/story/money/cars/2013/05/15/tesla-elon-much-capital-offering/2164259/
  4. repay its federal loans five years ahead of schedule: http://investorplace.com/2013/03/tesla-to-repay-465m-u-s-loans-five-years-ahead-of-schedule/
  5. said it would post its first quarterly profit: http://investorplace.com/2013/04/tesla-to-make-profit-for-first-time/

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