How Will Tesla Fare in an Increasingly Competitive EV Market?
Tesla Inc. investors who got in on the Thursday’s share sale received of the steepest discount it has offered in its 10-year history as a public company.
The electric car-maker’s US$2 billion secondary offering priced at US$767 per share, 4.60 per cent below Thursday’s closing price. That discount is over 10 times larger than Tesla’s last secondary offering in May, and quintuples the average discount given across its seven prior share sales.
An 83 per cent run-up this year before the offering launched might have contributed to the more buyer-friendly pricing terms, not to mention recent news of product recalls and fresh regulatory scrutiny. But Elon Musk probably isn’t losing any sleep over the matter, as the price per share was still more than double any of the company’s prior equity raises.
Six of Tesla’s previous secondary offerings -- conducted between 2011 and 2019 -- priced at discounts below 1.0 per cent. The bullish bidding helped Tesla fuel a decade of unparalleled price appreciation.
Shares fell three in pre-market trading to about US$780, above Thursday’s offering price.