Tesla’s cash haul leaves it in rarefied tier of S&P 500

New York: Tesla Inc will bring a huge war chest of cash to go with its eye-popping market valuation when it joins the S&P 500 Index later this month.

The electric vehicle maker’s latest trip to the capital markets — raising as much as $5 billion — means it will have raised a total of $12 billion this year alone, or more cash than is held by 88% of the companies in the S&P 500, including corporate stalwarts such as Pfizer Inc, AT&T Inc and Caterpillar Inc. The offering would also balloon Tesla’s cash balance to roughly $20 billion, according to Bloomberg Intelligence credit analyst Joel Levington.

The money will help support Tesla’s capital spending, which is expected to double in each of the next two years, as the company focuses on building two car factories — one in Austin, Texas, and its first European plant, near Berlin.


The company’s nearly $600 billion market value places it right between Facebook Inc and Berkshire Hathaway Inc, and would make it the sixth biggest stock in the S&P.

The sale is through an “at-the-market” offering program, according to a regulatory filing Tuesday, meaning the stock will be sold over time at prevailing market prices. Tesla has soared about 650% this year, a sign investors’ appetite for shares remains strong.

Chief Executive Officer Elon Musk is again seizing on a rally that started as the maker of the Model 3 began to post quarterly profits in the second half of last year. The opening of a plant near Shanghai, addition of the Model Y crossover to the lineup, advances in battery technology and anticipation of inclusion into the S&P 500 Index has led investors to assign Tesla a much richer valuation than any other auto manufacturer in the world.

The latest capital raise follows an issue of $5 billion shares in September and a $2 billion offering in February. That has helped Tesla more than double planned spending on plants and equipment this year. The new money will support plans announced in October to double the carmaker’s capital-expenditures budget during the next two years to a range of $4.5 billion to $6 billion.