Fresh off a 5-for-1 stock split on Monday that sent Tesla shares (TSLA) soaring, the automaker announced early Tuesday a new share sale program to raise capital.
The share offering, which is hoped to raise up to $5 billion, will be conducted through Wall Street’s main brokerages such as Goldman Sachs, BofA Securities, Barclays, Citigroup, Deutsche Bank Securities, Morgan Stanley, Credit Suisse, SG Americas, Wells Fargo and BNP Paribas.
As part of the agreement, Tesla will pay sales agents a commission of up to 0.5% for the sale of each share.
A $5 billion boost to Tesla’s bottom line is a big deal and one that would provide enough capital to easily continue the company’s rapid expansion. Earlier this year, Tesla raised more than $2 billion in another stock offering when shares were priced around $800.
Tesla shares were up in early pre-market trading by about 8%, but dropped to -4% after the share sale was announced. The rapid rise in price of the stock, up nearly 500% this year alone, has helped make CEO Elon Musk the third richest person in the world.
Legal Disclaimer – Mike holds shares of Tesla, Inc. (TSLA) and has no plans to change any positions within 72 hours.