- Tesla is planning to sell up to $5 billion in new shares, right after its stock split, a Tuesday security filing showed.
- Tesla’s 5-1 stock split came into effect on Monday.
- The $5 billion share sale represents roughly only 1% of the tech titan’s market value.
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Tesla plans to sell up to $5 billion in new shares, as investor demand for the electric vehicle maker’s stock shows no signs of abating.
According to a security filing on Tuesday, Tesla will sell the shares via an “at the market” offering, or ATM. ATMs allow a company to sell new shares directly into the market through a broker-dealer at current prices, but in any specified amount and over any period of time. Traditional capital raisings are usually done in one batch at a fixed price.
Goldman Sachs, BofA Securities, Barclays Capital, Citigroup Global Markets, Deutsche Bank Securities, Morgan Stanley, Credit Suisse Securities, SG Americas Securities, Wells Fargo Securities and BNP Paribas Securities Corp will be involved, the filing said.
Tesla shares, which have rallied by almost 500% so far this year to record highs, are one of the best-performers on Wall Street. The $5 billion is equal to around only 1% of Tesla's market cap, which is as of Monday's close is worth $498 billion.
The prior day, the company's previously announced 5-for-1 stock split, which was aimed at making its shares more affordable for smaller investors, came into effect. Tesla stock surged by as much as 12% to $498 per share.
Since August 11, when Tesla said it would enact the stock split, its shares have added more than 70%, even though a split changes nothing about a company's underlying fundamentals.
Despite Tesla's stunning rise to becoming the 9th-largest publicly traded company based in the US, it still is not part of the benchmark S&P 500, but this looks likely to change.
After Tesla reported its fourth straight quarter of profitability last month, the electric car maker finally became eligible to be included in the index.