When the U.S. Treasury assesses every green technology bet it made, it might find Tesla (NASDAQ:TSLA) the biggest winner of the bunch. The California-based electric car maker is gearing up to raise more than $1 billion as it looks past its U.S. Government loan and tries to increase investor confidence in the company. For an administration still criticized for losers like Solyndra, there is a lot to like about Tesla.
The good news started rolling out for Tesla weeks ago, when the company announced it would easily be able to pay back the $465 million loan from the government’s Advanced Technology Vehicles Manufacturing (ATVM) program. In fact, Tesla is paying off its debt five years ahead of the 10-year time slot it was allotted. According to Bloomberg, recent SEC filings show that the company is increasing its stock offerings, capitalizing on its current prices and showing CEO Elon Musk is all in with his purchase of another $100 million in Tesla stock.
After the sales are tallied, the total amount raised is likely to clear $1 billion. Meanwhile, investors are not hesitating at a time when some consider Tesla stock to be peaking. Shares have increased in value nearly 20 percent for the week, over 100 percent in the past month, and 170 percent since the start of 2013. Wouldn’t the new stock offering dilute the value of current shares?
Investors are showing they think not, as the week showed that most are as bullish about Tesla as the company’s chief executive. Though Mitt Romney used Tesla as a punching bag in his 2012 bid for president, few detractors (other than an unhinged Sarah Palin) have seen a reason to go after the company of late.
For the U.S. Treasury and the Obama Administration as a whole, Tesla is proving to be a much-needed success story in the green technology department. It’s now safe to put away fears that Tesla will turn out like Solyndra, the solar panel manufacturer that went bankrupt after receiving a government loan. The troubles of Fisker Automotive made the positive news about Tesla even more important to the Obama Administration. In the end, well-run companies can pay off for all investors, including Uncle Sam.