Tesla Stock Revs Up on Cash-Raising Efforts

Elon Musk will buy $10 million in new TSLA stock

May 2, 2019 at 9:59 AM
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Tesla Inc (NASDAQ:TSLA) stock is up 5.4% to trade at $246.80, after a Securities and Exchange Commission (SEC) filing revealed the electric car concern's plans raise over $2 billion in capital through convertible notes and a new stock offering. Additionally, TSLA CEO Elon Musk intends to buy $10 million of stock in the offering.

This follows the company's dismal turn in the earnings confessional last week, which sparked cash concerns. It also sent TSLA stock tumbling to a new annual low of $231.13. The security had been churning near here in recent sessions, but is now set for its highest close since April 25 -- the day before its 4.3% post-earnings drop. Year-to-date, Tesla is still off 25.8%.

Options traders have been positioning for even more downside for TSLA. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 10-day put/call volume ratio of 1.54 ranks in the 100th annual percentile, meaning puts have been bought to open over calls at an accelerated clip.

This skepticism is seen elsewhere on Wall Street, too. While a brow-raising 26.6% of TSLA stock's float is sold short, 65% of covering analysts maintain a "hold" or worse rating on the security.
 

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