Tesla CEO cashes in on IPO
Elon Musk, chief executive officer of Tesla Motors Inc., made at least $24 million (U.S.) from the electric-car maker’s initial public offering on Tuesday, restoring some of the wealth he staked on the company and other start-ups.
Tesla set a price of $17 a share and Musk sold 1.42 million shares, including an over-allotment to underwriters, according to filings and data compiled by Bloomberg.
Tesla rose by as much as 27 per cent to $30.42 Wednesday after a 41 per cent gain Tuesday — the second-biggest rally for a U.S. IPO this year. On Thursday, the stock pulled back $1.87, or 7.85 per cent, to $21.96 on the NASDAQ.
Musk, 39, who made about $300 million selling PayPal Inc. and Zip2 Corp., said in February he had just $650,000 in “liquid assets” at that time and had to get loans from friends to pay fees and support for estranged wife Justine Musk, according to a divorce-related filing.
The value of his remaining 26.9 million Tesla shares was about $642 million, based on Tuesday’s close.
Tesla, of Palo Alto, Calif., maker of the $109,000 electric Roadster bought by Brad Pitt and George Clooney, is using proceeds from the IPO to begin production of the battery-powered Model S sedan and to develop rechargeable models.
Along with celebrity customers, Tesla investors include Daimler AG. Toyota Motor Corp. said in May it will buy a $50 million stake.
The company also won $465 million in U.S. Energy Department loans last year to expand production and sales of electric vehicles and components. Terms of the federal loan agreement require Musk and other top Tesla executives to retain at least 65 per cent of the company’s shares. Musk has said in interviews he’s invested at least $70 million of his own money in Tesla.
A divorce settlement won’t affect his stake, Musk said Thursday.
“The Department of Energy, the underwriters, underwriters council, other investors have done their due diligence,” Musk said. “To the best of their assessment, they don’t think it will have an effect.”
He is also CEO of Space Exploration Technologies Inc. (or SpaceX), a Hawthorne, Calif.-based builder of rockets to carry satellites into space and supply the International Space Station. He also leads SolarCity Inc., a solar-panel installer.
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