What's going on?

Electric car darling Tesla wound the window down on Thursday on its plans to raise around $2 billion from investors, recharging its batteries after burning through almost $1 billion last quarter.

What does this mean?

Production problems early last year led to Tesla building fewer cars than expected � and investors were worried the company�s cash might run out of road. Two back-to-back profitable quarters briefly silenced the critics; but in April, Tesla drove over a banana skin. Fresh logistics issues meant that it didn�t deliver as many cars as forecast � and once again racked up a heavy quarterly loss.


With only $2 billion left in the bank, there was a chance Tesla could be caught short. Selling new shares in the company and �convertible� bonds (which may eventually turn into shares too) should give Tesla a much-needed fuel injection � particularly as Chinese rival BYD speeds ahead (tweet this).

Why should I care?

For markets: Safety first for Tesla�s stock.

According to Genuine Impact, which ranks over 3,000 public companies based on their financials, Tesla scores poorly for both its availability of cash and how it�s spent: the company doesn�t pay shareholders a dividend, instead spending money on expansion. An additional $2 billion in the trunk could help improve Tesla�s rating on the first point, thereby making it a more attractive investment. Crucially, Tesla�s CEO is putting his money where his rather voluble mouth is, buying $10 million of the fresh stock. His confidence may well have led investors to buy up Tesla�s existing shares on Thursday.

Zooming out: A different kind of comeback.

Sprawling American conglomerate 3M last week reported weaker-than-expected results � and job cuts to come. On Thursday, however, it announced its largest-ever acquisition, the $7 billion purchase of a medical products company. Healthcare is the worst-performing sector of the US stock market this year, but its �defensive� qualities could help 3M out of its murky market muddle.