The price is a 4.6% discount to its close Thursday, when plans for an offering were announced. CEO Elon Musk will buy $10 million and Oracle Corporation (NYSE:ORCL) billionaire Larry Ellison will purchase $1 million worth of stock in the offering, the company said.
Tesla's stock fell to $781 a share in Friday’s pre-market trading, a day after gaining nearly 5%. The shares are up 92% this year alone through Thursday.
In addition to the stock offering, Tesla released its audited 2019 annual report early Thursday and disclosed that on December 4, the Securities and Exchange Commission issued a subpoena seeking information concerning “certain financial data and contracts including Tesla’s regular financing arrangements.”
Tesla said the Department of Justice had also asked it to voluntarily provide information regarding financing arrangements.
Also, the electric car maker said that on December 4, the SEC closed its investigation into the projections and other public statements regarding Model 3 production rates. In the 2018 10-K filing, the SEC had issued subpoenas to Tesla in connection with CEO Musk’s statement regarding taking Tesla private and certain projections made for Model 3 production rates.
Tesla also said it expects capital expenditures to average between $2.5 billion and $3.5 billion a year in 2020 and 2021.
That likely will “equate to weaker free cash flow than it has generated in recent quarters,” said CFRA analyst Garrett Nelson. “We ... continue to view the stock’s current risk/reward as unfavorable.”
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