Summary
On May 7, 2019, Tesla, Inc. (TSLA) announced the closing of its previously announced underwritten public offerings, raising significant capital through the sale of common stock and convertible senior notes. The company sold approximately 3.55 million shares of common stock and $1.84 billion in aggregate principal amount of 2.00% Convertible Senior Notes due May 15, 2024. These offerings are a key development for Tesla, providing substantial funding. The convertible notes have a conversion price of approximately $309.83 per share and are subject to specific conversion triggers and conditions. In connection with these offerings, Tesla also entered into note hedge and warrant transactions to manage potential dilution and cost associated with the convertible notes. Investors should note the terms of these financial instruments and their potential impact on future share count and equity value.
Key Highlights
- 1Tesla closed an underwritten public offering of approximately 3.55 million shares of common stock on May 7, 2019.
- 2The company also raised $1.84 billion in aggregate principal amount of 2.00% Convertible Senior Notes due May 15, 2024.
- 3The convertible notes have an initial conversion price of approximately $309.83 per share.
- 4The notes are convertible under specific conditions related to stock price, trading price, and corporate events.
- 5Tesla entered into note hedge transactions to mitigate potential dilution from the convertible notes.
- 6Additional warrant transactions were executed, allowing counterparties to purchase up to ~1.5 million shares of common stock at $607.50 per share.
- 7The company incurred costs for the note hedge transactions ($475.8 million total, including $62.1 million for additional hedges) and received proceeds from warrant sales ($174.4 million total, including $22.8 million for additional warrants).