Shares of Tesla Inc. TSLA, +12.56% took a hit in premarket trading, but were still up 1.9%, after the electric vehicle maker disclosed a deal to sell up to $5 billion worth of its stock in an “at-the-market” offering program. ‘
Just before the offering was disclosed, the stock was up as much as 7.9%. At Monday’s closing price of $498.32, the program could represent up to 10 million shares, or about 1.1% of the shares outstanding.
The “equity distribution agreement” was made with a host of Wall Street firms as sales agents, including Goldman Sachs, BofA Securities, Barclays, Citigroup, Deutsche Bank Securities, Morgan Stanley, Credit Suisse, SG Americas, Wells Fargo and BNP Paribas.
The sales agents will receive a commission of up to 0.5% of the proceeds. The stock has rocketed nearly fivefold (up 495.6%) year to date through Monday, while the S&P 500 SPX, -0.21% has gained 8.3%.