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16 March 2017 By Robert Cyran Follow @rob_cyran

Elon Musk’s electric-car company will sell stock and notes worth just over $1 bln. Tesla is burning cash, and investing heavily to gear up for production of its Model 3. Unexpectedly small dilution pleases investors, but may miss the more important goal of capital sufficiency.

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Tesla said on March 15 it will sell about 1 million shares and $750 million of convertible notes. If underwriters exercise their option to buy an additional 15 percent of each offering, the amount raised would be about $1.2 billion. Chief Executive Elon Musk said he would purchase 25 million shares.

The electric-car company said it will devote between $2 billion and $2.5 billion in the first half of the year to capital expenditure to prepare for production of the Model 3, the company’s first mass-market vehicle.

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