Tesla (TSLA) – Get Report slipped from its record high Tuesday after the clean-energy carmaker said it would sell around $5 billion worth of shares as it prepares for its S&P 500 debut later this month.
Tesla unveiled the ‘at-the-market’ offering in a Securities and Exchange Commission that followed data from the China Passenger Car Association showed Tesla shifting 21,604 China-made vehicles last month, nearly double the October total and well ahead of the 11,329 sold in September, thanks in part to a resurgence in consumer demand from the COVID-hit economy.
Earlier this fall, Tesla’s China website indicated that starting prices for its popular Model 3, which are now made in its Shanghai factory, have been reduced by 8% to around $36,800 each, while the longer-range version was reduced to around $40,000 each.
The November figures should help the carmaker could inch closer to its goal of moving 500,000 cars over the whole of 2020, a target that requires a fourth quarter total of around 166,000.
Tesla shares were marked 2% lower in pre-market trading Tuesday following news of the share sales to indicate an opening bell price of $628.50 each, trimming gains since the stock’s five-for-1 split on August 31 to around 26.8% and valuing the Palo Alto, California-based group at around $600 billion.
Last month, S&P Dow Jones, which manages equity benchmarks around the world, said it would add Tesla shares to the S&P 500 on December 21, a move that could trigger a collective 73 million in new purchases from investment funds that track the world’s most traded index. Tesla shares have risen more than 55% since the November 16 announcement.
Tesla, which became eligible for inclusion following its fourth consecutive quarterly profit over the summer and has a market cap of $608 billion, will sit just ahead of Warren Buffett’s Berkshire Hathaway (BRK.B) – Get Report and around $200 billion below Facebook (FB) – Get Report on the U.S. benchmark.