Tesla’s decision to raise $2 billion by selling new stock this Wednesday caught a lot of fans and investors by surprise. Until recently, it was hard not to fall in love with Tesla and its goal of making new electric cars affordable and fun. The stock price has gone up by nearly 700% in five years and Consumer Reports called the Tesla Model S the best car it ever tested back in the summer of 2013.
The bad news is, since that time, Tesla has been forced to confront a reality that many of us deal with in our own lives: money and popularity can't solve our biggest problems. And Tesla, it just so happens, has a lot of problems.
If you invested $1 in Tesla back in September 2014, you now have around 70 to 80 cents. The company’s stock has been quietly stagnant for three years now, and Tesla’s announcement that it's selling $2 billion in shares to raise much-needed cash is setting off warning bells.