Briefing

Tesla issuing new shares to raise more than US$2 billion

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The electric-car company plans to use the money to strengthen its balance sheet at a time when its stock price is at an all-time high. The company had US$11.6 billion in debt at the end of 2019. In its annual filing, Tesla also said the U.S. SEC and Justice Department had issued probes into the company. (Financial Times)

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Talking point: The news, which sent Tesla’s stock up almost 10 per cent in early afternoon trading, came as a surprise to many investors. In January, CEO Elon Musk said he didn’t intend to raise money because the company could generate sufficient cash to reduce its losses through sales, even with its aggressive growth plans. In a release, Tesla said it expected to remain profitable going forward. However, the company is facing a number of big expenses: it recently started producing its Model Y SUV and plans to build a new factory in Germany. And just a month after launching its made-in-China Model 3 for that market, the firm had to shut down its Shanghai factory amid the coronavirus outbreak, sending its stock down nearly 20 per cent on the news.