Tesla to raise about $1.15bn in stock, notes

Tesla CEO Elon Musk had previously said that while his company had enough capital to meet the demands for the Model 3, it would take it "very close to the edge". The underwriters increased the amount of equity and convertible notes to $1.2 billion.

The company, led by Elon Musk, said it sold 1.3 million common shares at $262 apiece to raise $350 million and that it raised another $850 million though the sale of convertible senior notes due 2022.

Tesla shares opened at $264 Friday morning before dropping 0.7% and then rebounding.

Tesla's warning that it would spend $2 billion-$2.5 billion in the first half of 2017 in capital expenditures left little cushion at a critical time ahead of its Model 3 production, which the company says will begin in July.

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Tesla Inc.is about to start production of its upcoming Model 3 later this year, but a lot of analysts believe that building the auto will come at a massive cost for the company.

Denning was quick to point out that Tesla's former CFO Jason Wheeler said $1 billion of liquidity represents a "nice comfort level" for the company.

Tesla said Musk, already the company's top shareholder with a stake of about 21 per cent as of December, bought 95,420 common shares for $25-million in the latest stock sale. "In connection with establishing their initial hedge of the convertible note hedge and warrant transactions, the hedge counterparties or their affiliates expect to enter into various derivative transactions with respect to Tesla's common stock concurrently with or shortly after the pricing of the notes, including with certain investors in the notes". After burning through cash late last year and Musk's warning to Wall Street that the company coffers were "close to the edge", Tesla announced on Wednesday that it would sell new stock and convertible securities while preparing for volume production and deliveries of its first mass-market auto later this year.

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