The road has not been easy for luxury electric car manufacturer Tesla. Since its inception in 2003, the company has faced several brushes with financial ruin. According to an article published this week from Business Insider, the company may be in the throes of a cash shortage once again.
Tesla’s Elon Musk has announced that the company will release a stock offer of $640 million, up $140 million from the company’s initial $500 million offer.
According to multiple sources, the money is intended to fund two Tesla projects: the company’s forthcoming battery factory in Nevada and the expansion of its national network of charging stations called “Superchargers”.
Musk is rumored to be forking over $20 million of his own money. The fact that Tesla is launching another fundraising campaign should have “surprised no one” who is familiar with the company’s occasional financial struggles.
The move surprised no one who has been following the ups and downs of Tesla’s fortunes and stock price over the past 12 months, although it came sooner than anyone really thought.
The Wall Street Journal reported Friday that investors “cheered” when Musk announced the stock offering.
In response to the offering, Tesla’s stock prices rose 1% to $244.75 per share.
The company was quoted as saying they are going to “sell about 2.69 million shares,” which will raise about $2 million above $650 million.
Since 2013, Tesla has raised “more than $4 billion.”
The auto maker has sold convertible notes and obtained lines of credit during that period to fund its ambitious bid to move from niche luxury-vehicle maker to a sizable force in the car business.
Experts suggest that Musk is now aware that his luxury electric-car venture is much more expensive than he initially thought, and that the company has had to “burn large sums of cash” on new Tesla products and the expansion of various parts of its business.