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Tesla (TSLA) Stock Jumps After Tencent Buys 5% Stake
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Chinese tech giant Tencent Holdings Ltd. (TCEHY - Free Report) has purchased a 5% stake in Tesla Inc. (TSLA - Free Report) according to a recently released U.S. regulatory filing. The purchase makes Tencent one of Tesla’s biggest investors at a time when Tesla desperately needs to raise money.
Tencent, one of China’s most valuable companies, paid roughly $1.8 billion for its 5% stake in Tesla. Tencent purchased 8.17 million shares through a recent Tesla stock offering and the open market. Tencent’s 5% stake makes it Tesla’s fifth-largest shareholder, according to Bloomberg. The Chinese company took a passive stake in Tesla, which means it is unlikely to try to pressure the electric car maker to make any changes.
In the wake of the news, Tesla’s stock rose 3.42% to $279.39 per share in early afternoon trading Tuesday. Tesla is a Zacks Rank #3 (HOLD).
Tencent is hardly well-known outside China, but it is the world’s largest video game publisher by revenue. The company now owns both “League of Legends” and “Clash of Clans,” two massively popular video games. Tencent also owns two major Chinese social-media platforms WeChat and Weixin, which boast 890 million monthly active users combined.
In early January 2011, Tencent’s stock price was $4.51 per share. Today, Tencent’s stock is up 1.75% to $29.49 per share and is a Zacks Rank #3 (HOLD). With a market cap of $276.6 billion, the Internet giant is now worth more than Chinese e-commerce powerhouse Alibaba Group Holding Ltd. (BABA - Free Report) , which has a market cap of $269.7 billion.
The major Tencent investment comes as Tesla continues to push towards the launch of its first mass-market car, the Model 3, in late 2017. Tesla plans to begin manufacturing its new less-expensive electric car by summer 2017 in order to start fulfilling the 373,000 pre-orders of the $35,000 Model 3 sedan.
Tesla needs to raise a massive amount of money in order to produce the new electric sedans. Tencent’s major investment is a start.
The electric car company has over $2 billion worth of debt due in 2018. Still, Tesla’s stock price has climbed 26% in 2017, and the company has reached a market cap of $45.5 billion. Tesla is now the second most valuable U.S. auto company behind only General Motors (GM - Free Report) .
Tesla has grown its presence in China, where it now has 24 stores and 348 regular charging stations. China imported 11,839 Tesla vehicles in 2016, five times more than the previous year.
Is Musk Overselling The Massive Model 3 Roll Out?
Tesla’s chairman and largest shareholder Elon Musk’s plan to transform his company from a luxury electric car company into a sustainable energy powerhouse is in full swing. But the introduction of its new solar power and sustainable battery businesses, as well as a new mass-market electric car has done little to help improve Tesla’s debt-laden and unprofitable bottom line.
Musk hopes to produce 500,000 electric vehicles a year by the end of 2018 and 1 million by 2020. In order to do so, Tesla said earlier this month it would try to raise a total of nearly $1.4 billion through a stock and debt offering.
On a call with investors last month, Musk said the company is ready to place orders with suppliers for “1,000 cars a week in July, 2,000 a week in August, and 4,000 a week in September.” Tesla hopes to push that number to 5,000 cars a week by the end of 2017 and to 10,000 a week by the end of 2018.
But the massive roll out of that many electric cars “would be absolutely unprecedented based on what we know about car markets today and how people spend their dollars,” Bloomberg electric car analyst Salim Morsy said. “It could happen. I’m pretty sure it won’t.”
Other Tesla Endeavors
Tesla announced it is ready to enter the Middle East market, opening a pop-up store and a service center by July to sell its luxury electric cars in the United Arab Emirates. Tesla has similar plans for Abu Dhabi by 2018.
South Africa, Musk’s home country, has been in talks with the Silicon Valley-based company to open a manufacturing plant there. Musk also recently announced his intentions to bring Tesla to India. Tesla’s $2.1 billion acquisition of solar power giant SolarCity signaled its massive move into the sustainable energy sector.
Musk’s Space Exploration Technologies Corp (SpaceX) plans to make history this week when it hopes to launch a rocket into space using engine boosters that have already been used. SpaceX’s Thursday launch at the Kennedy Space Center in Florida is set to prove that the use of previously fired engines makes frequent and cheaper space travel possible. Musk and SpaceX want to begin to colonize Mars by 2024.
The South African entrepreneur just launched a new company called Neuralink Corp as he tries to fuse computers with human brains in order to help mankind compete during the upcoming age of artificial intelligence and robotics.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>
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Tesla (TSLA) Stock Jumps After Tencent Buys 5% Stake
Chinese tech giant Tencent Holdings Ltd. (TCEHY - Free Report) has purchased a 5% stake in Tesla Inc. (TSLA - Free Report) according to a recently released U.S. regulatory filing. The purchase makes Tencent one of Tesla’s biggest investors at a time when Tesla desperately needs to raise money.
Tencent, one of China’s most valuable companies, paid roughly $1.8 billion for its 5% stake in Tesla. Tencent purchased 8.17 million shares through a recent Tesla stock offering and the open market. Tencent’s 5% stake makes it Tesla’s fifth-largest shareholder, according to Bloomberg. The Chinese company took a passive stake in Tesla, which means it is unlikely to try to pressure the electric car maker to make any changes.
In the wake of the news, Tesla’s stock rose 3.42% to $279.39 per share in early afternoon trading Tuesday. Tesla is a Zacks Rank #3 (HOLD).
Tencent is hardly well-known outside China, but it is the world’s largest video game publisher by revenue. The company now owns both “League of Legends” and “Clash of Clans,” two massively popular video games. Tencent also owns two major Chinese social-media platforms WeChat and Weixin, which boast 890 million monthly active users combined.
In early January 2011, Tencent’s stock price was $4.51 per share. Today, Tencent’s stock is up 1.75% to $29.49 per share and is a Zacks Rank #3 (HOLD). With a market cap of $276.6 billion, the Internet giant is now worth more than Chinese e-commerce powerhouse Alibaba Group Holding Ltd. (BABA - Free Report) , which has a market cap of $269.7 billion.
The major Tencent investment comes as Tesla continues to push towards the launch of its first mass-market car, the Model 3, in late 2017. Tesla plans to begin manufacturing its new less-expensive electric car by summer 2017 in order to start fulfilling the 373,000 pre-orders of the $35,000 Model 3 sedan.
Tesla needs to raise a massive amount of money in order to produce the new electric sedans. Tencent’s major investment is a start.
The electric car company has over $2 billion worth of debt due in 2018. Still, Tesla’s stock price has climbed 26% in 2017, and the company has reached a market cap of $45.5 billion. Tesla is now the second most valuable U.S. auto company behind only General Motors (GM - Free Report) .
Tesla has grown its presence in China, where it now has 24 stores and 348 regular charging stations. China imported 11,839 Tesla vehicles in 2016, five times more than the previous year.
Is Musk Overselling The Massive Model 3 Roll Out?
Tesla’s chairman and largest shareholder Elon Musk’s plan to transform his company from a luxury electric car company into a sustainable energy powerhouse is in full swing. But the introduction of its new solar power and sustainable battery businesses, as well as a new mass-market electric car has done little to help improve Tesla’s debt-laden and unprofitable bottom line.
Musk hopes to produce 500,000 electric vehicles a year by the end of 2018 and 1 million by 2020. In order to do so, Tesla said earlier this month it would try to raise a total of nearly $1.4 billion through a stock and debt offering.
On a call with investors last month, Musk said the company is ready to place orders with suppliers for “1,000 cars a week in July, 2,000 a week in August, and 4,000 a week in September.” Tesla hopes to push that number to 5,000 cars a week by the end of 2017 and to 10,000 a week by the end of 2018.
But the massive roll out of that many electric cars “would be absolutely unprecedented based on what we know about car markets today and how people spend their dollars,” Bloomberg electric car analyst Salim Morsy said. “It could happen. I’m pretty sure it won’t.”
Other Tesla Endeavors
Tesla announced it is ready to enter the Middle East market, opening a pop-up store and a service center by July to sell its luxury electric cars in the United Arab Emirates. Tesla has similar plans for Abu Dhabi by 2018.
South Africa, Musk’s home country, has been in talks with the Silicon Valley-based company to open a manufacturing plant there. Musk also recently announced his intentions to bring Tesla to India. Tesla’s $2.1 billion acquisition of solar power giant SolarCity signaled its massive move into the sustainable energy sector.
Musk’s Space Exploration Technologies Corp (SpaceX) plans to make history this week when it hopes to launch a rocket into space using engine boosters that have already been used. SpaceX’s Thursday launch at the Kennedy Space Center in Florida is set to prove that the use of previously fired engines makes frequent and cheaper space travel possible. Musk and SpaceX want to begin to colonize Mars by 2024.
The South African entrepreneur just launched a new company called Neuralink Corp as he tries to fuse computers with human brains in order to help mankind compete during the upcoming age of artificial intelligence and robotics.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging
phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>