Canadian Manufacturing

Tesla, SolarCity shares bounce as merger looms

Elon Musk says neither company will need to raise equity this year

October 11, 2016  by The Associated Press

PHOTO: Alexis Georgeson/Tesla

With no shortage of projects on its plate, Tesla is planning another product launch next week. PHOTO: Alexis Georgeson/Tesla

DETROIT—Shares of Tesla Motors Inc. and SolarCity Corp. rose in trading early this week after the high-profile head of both companies said they won’t have to raise money this year.

Elon Musk tweeted over the weekend that the money-losing companies won’t need to raise equity or corporate debt in the fourth quarter despite a proposed merger and other potentially costly moves.

Musk also said Tesla will introduce a new product on Oct. 17, adding yet another project to its growing list of business operations. The automaker’s lower-cost Model 3 is also due out next year.

Musk—who is the chairman of SolarCity and the CEO of Tesla—proposed in June that Tesla acquire SolarCity. The deal has since been delayed by multiple lawsuits, and has faced opposition from the outset. It recently cleared the antitrust hurdle when the Federal Trade Commission green-lit the merger, but shareholders must still vote to determine the outcome.

Tesla shares rose 2.2 per cent to close Oct. 10 at $200.95. SolarCity gained 4.9 per cent to $19.59.