Tesla on Tuesday revealed plans to sell up to $5 billion worth of its stock in an “at-the-market” offering program designed to take advantage of the electric car and battery maker’s recent stock price surge and split.
In a Securities and Exchange Commission filing, Tesla disclosed on Tuesday that it has entered into a so-called “equity distribution agreement” to sell the additional allotment of up to 10 million shares, or about 1.1% of its total shares outstanding.
Goldman Sachs, BofA Securities, Barclays Capital, Citigroup Global Markets, Deutsche Bank, Morgan Stanley, Credit Suisse, SG Americas, Wells Fargo and BNP Paribas are all involved in the stock offering, according to the filing.
The move comes amid a banner year for Tesla, which has seen its share price gain nearly 500% amid stronger-than-expected sales and a quicker-than-anticipated path toward profitability – something that seemed elusive at the beginning of the pandemic in March but which has since been proven wrong by record sales.
Shares of Tesla were down 1.91% at $488.22 in trading on Tuesday.
It also follows the Palo Alto, California-based company’s 5-for-1 stock split, which was announced on Aug. 11 and went into effect on Monday.
Tesla shares have gained more than 50% since it unveiled plans for the split, with its stock soaring 81.3% through Monday alone. The electric vehicle maker is moving toward a likely inclusion in the S&P 500 stock index this fall.
All the recent news prompted at least one Tesla bear to throw in the proverbial towel on being completely bearish.
RBC Capital analyst Joseph Spak held on to his underperform rating on Tesla but lifted his one-year price target to $290 from $170 on the admission that his team “underestimated a critical valuation point: seemingly insatiable investor demand for alternative/clean vehicles.”
To be sure, analysts, investors and TheStreet’s Jim Cramer and Tesla Daily’s Rob Maurer are all awaiting Tesla’s highly anticipated Battery Day on Sept. 22.
In an interview with Tesla Daily Maven Rob Maurer, Cramer said Battery Day is a must-watch. “What’s key to my valuation, Rob, is what Elon Musk will say on September 22,” Cramer said.