GP: Elon Musk, CEO of Tesla Inc., speaks at an on-site event for the company's manufacturing facility in Shanghai, China, Monday, January 7, 2019.
Qilai Shen | Bloomberg | Getty Images
Tesla said in a filing on Thursday that it would increase up to $ 2 billion, with $ 650 million coming in the form of new equity and $ 1.35 billion in convertible notes.
CEO Elon Musk signaled the intention to buy about $ 10 million of the company's share in the new offer. Total share dividend is for 2.7 million shares in Tesla. Muska's purchase will be 41[ads1].896 shares.
The move comes just a week after Musk questioned the company's capital increase any time soon.
"I don't think raising capital should be a substitute for making business more efficient," Musk told the shareholders on the company's quarterly conference call. "I think there are some benefits to raising capital but are probably at the wrong time."
Tesla shares fell earlier in the premark trade when the company issued a first filing indicating that it would be offering a mix of debt and shares. The stock then reversed the course and was last trading 5.7% higher when a new filing revealed details of the offer, including Musk's interest in buying a block of the new shares.
Musk's purchases have been reliably short-term short-term buying signals for the shares of the past, according to InsiderScore.com. After the last 5 purchases from Musk, the shares were on average higher by 41% over the next three months, according to InsiderScore.
Shares in the controversial electric automaker have been squeezed in the past, almost 30% from the beginning of the year. The share's increase after the filing came from "the fact that they pulled off the tire assistance and decided to raise capital," said Dan Ives, managing director of equity research at Wedbush Securities, CNBC.
"There was growing fear that this company would need incremental money for the second half of the year. For the first time, they listened to investors and the math didn't lie to what they needed to do," Ives said. "Now it's a relief because the liquidity problem and the funding problem can be put on hold in the short term."
The offer is subject to Goldman Sachs, Citigroup, Bank of America, Deutsche Bank, Morgan Stanley, Credit Suisse, Societe Generale and Wells Fargo.
– CNBCs Yun Li contributed to this report.