Why Tesla raising up to $5 billion in its third share sale this year

Tesla Inc. is going back to the capital markets for the third time in ten months by selling as much as $5 billion of common stock, taking advantage of its surging shares and inclusion in the S&P 500 Index.

The sale will be through an “at-the-market” offering program, Tesla said Tuesday in a regulatory filing.

Shares of Tesla closed Tuesday’s trading up 1.3 percent to $649.88.

The offering comes after CEO Elon Musk urged employees on Dec. 1 to be mindful about spending and play a “Game of Pennies” even after Tesla reported a fifth consecutive quarter of profit in October. The automaker had $14.5 billion in cash and cash equivalents at the end of September, but insatiable demand for its shares has allowed it to boost spending while still buttressing its balance sheet.

The stock has rallied almost 670 percent this year, buoyed in part by a widely anticipated decision by S&P Dow Jones Indices to include Tesla in the blue chip benchmark as of Dec. 21.

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 automaker’s capital-expenditures budget during the next two years to a range of $4.5 billion to $6 billion.

Tesla is currently building two new factories — one in Austin, Texas, and its first European plant near Berlin — and expanding output at its existing vehicle assembly facilities in Fremont, California, and Shanghai.

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