The funds raised from the “at-the-money” offering will be used to shore up the electric-vehicle maker’s balance sheet, according to a regulatory filing out Tuesday. Tesla had $8 billion debt, excluding vehicle and energy financing, at the end of its fiscal third quarter.
Wedbush analyst Dan Ives called the decision "another smart strategic move" while adding, "We believe this capital raise is a clear positive and further solidifies our bull case price target scenario of $1,000 with our base target $560" while keeping his neutral rating on the stock.
Shares fell as much as 3.2% ahead of the opening bell.
The stock offering is the third to be announced by Tesla this year as the company has taken advantage of several run-ups in its share price that have produced a 667% year-to-date gain and lifted its market capitalization to $608.32 billion. Only five S&P 500 companies have a value above this level.
Tuesday's announcement comes as shares have soared 57% since S&P Dow Jones Indices announced on Nov. 16 that Tesla would be added to the S&P 500. The stock hit $641.76 per share Monday.
The Palo Alto, California-based company in September issued $5 billion of stock a day after shares spiked 13% in response to news of a 5-for-1 split. In February, Tesla raised $2 billion following an 83% surge in its stock price over the first 42 days of the year.
Tesla’s runaway share price has resulted in more than $35 billion of losses this year for short-sellers who have bet against the stock, according to financial analytics firm S3 Partners.
Noted Tesla bear Jim Chanos, founder of New York-based Kynikos Associates, last week told Bloomberg News that being short the stock has “been painful” and that he has trimmed his position.