Early last week, I had an article detailing four major questions when it came to Tesla (TSLA) in the short term. With the stock having dropped to a new 52-week low after the company's Q1 earnings report, investors were worried and pressure on management had certainly increased. Later in the week, one of the major questions was answered, and that now means investors will start to focus on the next set of items.
With questions swirling over the company's balance sheet and cash position, management followed through and decided to raise capital. Between a sale of shares and convertible notes, Tesla will raise up to $2.7 billion before expenses as well as certain hedges. CEO Elon Musk was going to invest $10 million in the deal, but when the overall deal size was increased, he reportedly upped his portion to $25 million. Ironically, instead of Tesla going private at $420 per share after the "funding secured" tweet from Elon Musk last year, the company ended up selling shares for proceeds that were less than $240 per share in the end.