Elon Musk
Elon Musk

American electric vehicle maker, Tesla, has announced plans to sell up to USD 5 billion worth of stock. This announcement comes a day after the 5-for-1 stock split took effect.

The company informed the securities regulators that it intends to sell up to 10.03 million shares and use the proceeds for unspecified general corporate purposes.

The sales would be made "from time to time", the company said. In addition, the company also stated that the actual amount of the offering cannot be determined at present. The stock would be sold through 10 different brokerage houses, and each would get a 0.5 per cent commission.

The company in its filing said, “We have entered into an equity distribution agreement, or the equity distribution agreement, with Goldman Sachs & Co. LLC, BofA Securities, Inc., Barclays Capital Inc., Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Morgan Stanley & Co. LLC, Credit Suisse Securities (USA) LLC, SG Americas Securities, LLC, Wells Fargo Securities, LLC and BNP Paribas Securities Corp., as our sales agents, under which we may offer and sell from time to time our common stock having an aggregate offering price of up to USD 5,000,000,000.”

As of June 30, Tesla had USD 8.6 billion in cash and roughly USD 8.5 billion in debt excluding vehicle and solar panel financing.

The electric car maker has gained nearly 500 per cent in 2020. Tesla’s share price was USD 2,213.40 on Friday before the 5-for-1 stock split was implemented on Monday. Post split, the company shares opened at USD 444.61. Tesla shares closed on Tuesday down 4.7 per cent to USD 475.05. The filing with the U.S. Securities and Exchange Commission came before the markets opened.

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