Tesla to raise money after painful 1Q, and Musk is buying in

For all the brash talk and easy confidence Musk has exuded about Tesla's future he still hasn't figured out how to profitably mass-produce its cars

According to plans revealed, Tesla will try to sell 2.72 million new shares, worth United States dollars 650 million, as well as convertible bonds worth USD 1.35 billion.

Musk himself intends to buy $10 million of the shares once they are offered.

The company anticipates gross proceeds of about $2.3 billion, before discounts and expenses. Stock in Tesla jumped Thursday morning by almost 5% at the news, although the company's shares recently have traded at their lowest point in more than two years. The company faces expensive challenges, including launching production in China, overhauling its US retail and service operations and developing new models, including the high-volume Model Y SUV and a Semi commercial truck.

Having another $2 billion in the bank would give Tesla much-needed breathing room. The company had $2.2bn of cash at the end of the quarter, down 40% from the $3.7bn it had the previous quarter.

Material from Reuters was included in this report.

Difficulties in delivering cars to China and Europe and softening demand for luxury cars hit Tesla particularly hard in the first quarter of 2019. Tesla's Gigafactory in Shanghai would allow the automaker to avoid high import tariffs.

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After reporting a loss per share that was double what Wall Street expected, Musk sought to assure investors on Tesla's April 24 earnings call that the company would return to profitability in the third quarter.

Musk again lavished praise on Tesla's self-driving strategy, telling investors autonomous driving will transform Tesla into a company with a $500 billion market cap.

The conversion premium at which the bonds can be exchanged for stock in the future, was also at the bottom of the initial range given by the company - another concession.

Most of the offering will come in the form of convertible bonds due 2024, per the filing. Additional book-runners in the underwriting syndicate are Merrill Lynch, Deutsche Bank, Morgan Stanley and Credit Suisse.

The lending was disclosed in a Tesla prospectus for the fundraising, and showed the debt to be $117m less than the personal loans Musk disclosed in a similar 2017 prospectus.

Shares of Tesla Inc. jumped 5 percent before the opening bell.

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