Tesla Cashes In On Stock Surge With Share Offering To Raise Up To $5 Billion

Capitalizing on surging demand for its shares, electric-car maker Tesla
TSLA
will raise up to $5 billion in an at the market share offering on the heels of its just-completed stock split that made it more affordable to retail investors.

Proceeds from the sale will be used to fund the company’s expanding operations, including a new Gigafactory under construction near Austin, Texas, and CEO Elon Musk’s current ambitions that include plans for breakthrough battery technology and a Tesla-operated robotaxi network. The new shares will be sold through the top-tier investment banks, including Goldman Sachs
GS
, BofA Securities, Barclays Capital, Citigroup Global Markets, Deutsche Bank, Morgan Stanley
MS
, Credit Suiss
CS
e, SG Americas, Wells Fargo Securities and BNP Paribas. 

Tesla closed at $498.32 on Aug. 31, after it completed a five-for-one stock split to bring down the price. The stock declined about 2% in early Nasdaq
NDAQ
trading Tuesday. 

Monday’s 12.6% stock surge boosted Musk’s net worth to $102.9 billion at the market close. Forbes calculates that he is now the fifth centibillionaire in the world, as well as the fifth-richest person in the world. 

The quadrupling of Tesla’s value this year has been driven by investors taken with Musk’s vision for a clean transportation and clean power future and who aren’t troubled by how overvalued the stock is relative to current earnings and revenue. Tesla’s market capitalization of $464 billion as of Aug. 31, for example, is 16 times its expected revenue this and exponentially greater than its likely net income. 

The company is to update shareholders at its annual meeting on Sept. 22, when it will also share the latest developments on its battery technology.