Tesla raises share offering to $642.5 million: Reuters

Electric car maker Tesla Motors Inc (TSLA.O) said it was looking to raise about $642.5 million through a share sale, above the $500 million it announced on Thursday.

The company said on Friday it would offer about 2.7 million shares at $242 per share, a slight discount to Thursday’s close of $242.51. (bit.ly/1J447y5)

The company’s shares were up 0.7 percent at $244.10 in premarket trading.

Chief Executive Elon Musk will maintain his investment of $20 million in the offering, Tesla said.

The automaker said on Thursday it would sell 2.1 million shares.

“Tesla’s (offering), combined with existing credit lines, will provide the company with more than enough cash for operational purposes into 2016,” S&P Capital IQ analyst Efraim Levy said late on Thursday.

The company has been burning through cash as it expands its auto and energy storage businesses.

Tesla said on Thursday it would use proceeds from the sale to help fund its upcoming Model 3 project and Nevada-based battery gigafactory.

Tesla’s Model 3 vehicle, which will compete with BMW’s (BMWG.DE) 3 Series sedans, is expected to go on sale in 2017.

Up to Thursday’s close, Tesla’s stock had fallen about 10 percent since Aug. 5, when the company reported second-quarter results.

(Reporting by Sagarika Jaisinghani and Arunima Banerjee in Bengaluru; Editing by Sriraj Kalluvila and Maju Samuel)