Tesla Raises $226 Million Through IPO
Tesla has become the first American car company to go public in 54 years, and has raised some $226 million in the process. The electric vehicle producer is the first automaker since Ford in 1956 to have an initial public offering (IPO).
Initially, Tesla planned on offering 11.1 million shares at $14-$16 each, but later increased that figure to 13.3 million. According to Bloomberg data and a filing with the U.S. Securities and Exchange Commission, Tesla also increased the share price to $17 each for a total around $226 million. The company will trade under the symbol TSLA. Tesla CEO Elon Musk rang the NASDAQ Stock Market opening bell today.
Going public may seem like a good way for several Tesla affiliates, as well as Musk — who has reportedly gone broke after spending more than $70 million of his own money — to recoup their losses.
The cash infusion from the IPO comes at a good time for the company yet to turn a profit after seven years. Tesla will use the funds from its IPO along with a $465 million federal loan to buy a factory in which to produce the Model S sedan and put the sedan into production. Toyota and Tesla have already been in talks about reopening the now abandoned New United Motor Manufacturing Incorporated plant in Fremont, Calif.
The federal government, however, has put a few measures in place with its loan to ensure that Musk, along with a few other key players, remain Tesla investors. In order for Tesla to secure the loan, Musk and other certain unnamed Tesla affiliates must retain 65 percent of their stock in Tesla for at least one year after completing the Model S project.
As part of the deal to reopen NUMMI, both Tesla and Toyota would produce an electric vehicle there in 2012. Tesla’s plan: a production version of the Model S, as well as possible Model S derivatives and a new Roadster. Toyota’s EV plans for NUMMI, however, remain less clear. In addition to reopening the NUMMI plant together, Tesla and Toyota also came to a deal in which the Japanese giant invested $50 million in the American startup and would later be granted common stock. Following the IPO, Toyota now owns roughly 2 percent of Tesla.