LOS ANGELES, CA - APRIL 30:  Elon Musk, CEO of Tesla, with a Powerpack unit the background unveils suit of batteries for homes, businesses, and utilities at Tesla Design Studio April 30, 2015 in Hawthorne, California. Musk unveiled the home battery named Powerwall with a selling price of $3500 for 10kWh and $3000 for 7kWh and very large utility pack called Powerpack. (Photo by Kevork Djansezian/Getty Images)

Why Tesla Made $250 Million in Stock Available Today

Anyone looking to invest in Tesla, the curious electric car company run by Elon Musk, got some good news on Tuesday when, in a move to raise capital for an expectedly busy year, it made available $250 million in common stock.

The price immediately shot up after the 4:30 p.m. announcement, from $255 to nearly $264 a share in a matter of minutes. Musk will also buy $25 million in common stock, Tesla announced.

So what does it mean for a non-finance expert? Well, the additional stock being made available isn’t a surprise, but the amount is, says Clark Schultz, an editor at finance website Seeking Alpha and founder of MoneyRates.com.

“Tesla’s decision to raise capital in front of the ramp-up in production of the Model 3 was highly anticipated,” Clark tells Inverse. “Investor reaction to the raise is likely to be split between the bullish camp that says the capital raise of [around $1.15 billion] is less than expected, while skeptics will point to the funding problems the EV manufacturer could continue to face.”

Schultz makes clear that anybody could buy Tesla stock, of course. It’s a controversial move to some, of course.

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“The news just really means that Tesla needed to raise over a billion dollars to fund its plan to bring electric vehicles to the masses with its new Model 3,” he says. “In the future, Tesla hopes to sell over 1 million electric vehicles a year and is using the capital raise to fund its growth.”


Additional reporting by James Grebey

Photos via Getty Images / Kevork Djansezian
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