UPDATE: On Friday, Tesla increased its offering to 3.1 million shares and said CEO Elon Musk would more than double his original purchase, from $10 million to $25 million. Investors initially welcomed the news, although the stock traded slightly lower before the opening bell Friday.


Tesla announced Thursday that the company would offer $650 million in stock and $1.35 billion in bonds in a bid to boost the automaker's coffers after disappointing first quarter results. 

CEO Elon Musk said he would buy $10 million of the company's shares in an effort to boost confidence among investors in the flagging automaker. Stock in Tesla jumped Thursday morning by nearly 5% at the news, although the company's shares recently have traded at their lowest point in more than two years.

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The company announced last week that it had $2.2 billion cash on hand and hinted that a capital raise would be considered by the automaker, despite Musk's comments last year that the company had enough cash to withstand convertible bond repayments and the cost of building cars.

Difficulties in delivering cars to China and Europe and softening demand for luxury cars hit Tesla particularly hard in the first quarter of 2019. The company reported losses per share of roughly double what analysts predicted, and the company burned through $700 million in cash between January and April.

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Tesla said the sale could gross $2.3 billion in reserves and the company will sell roughly 2.7 million shares. Tesla said it expects expenditures of $2 billion to $2.5 billion this year, and $3 billion for the next two fiscal years.

The money would potentially fund Tesla's factory in Shanghai, Model Y crossover production, and development of the company's upcoming pickup and semi trucks.