Tesla bear cuts price target on Elon Musk's electric-car company by 6%

Jeffrey Osborne, an analyst at Cowen, cut his price target for Tesla from $160 to $150 in a note to investors on Friday.Osborne said he believed Tesla's upcoming capital raise was “badly needed” but too small to cover future costs.“We update our model to reflect the up to $2.7bn capital raise, which was badly needed but do not see this as sufficient to fund capex, pay off debt, and offset the cash burn that is playing out with lower than planned volume and margins on the Model 3,” Osborne said.Visit Business Insider's homepage for more stories.Jeffrey Osborne, an analyst at Cowen, cut his price target for Tesla from $160 to $150 in a note sent to investors on Friday.Osborne said he believed Tesla's upcoming capital raise was “badly needed” but too small to cover future costs.“We update our model to reflect the up to $2.7bn capital raise, which was badly needed but do not see this as sufficient to fund capex, pay off debt, and offset the cash burn that is playing out with lower than planned volume and margins on the Model 3,” Osborne said. Read more: Tesla's stock reclaims a key level after the electric-car maker ups the size of its capital raiseTesla announced on Friday that it intends to raise up to $2.7 billion in equity and convertible bonds, up from the $2.3 billion figure it gave when it first announced the capital raise on Thursday.The electric-car maker will offer 3.1 million shares of its stock and $1.6 billion worth of convertible notes, it said in new regulatory filings. Tesla had previously planned to offer 2.72 million shares and $1.35 billion worth of convertible notes.Tesla CEO Elon Musk has signaled that he may buy up to 102,880 shares worth $25 million, up from a maximum of 41,896 shares worth $10 million.The company's shares rose 1.2% in premarket trading on Friday and were trading at $246.95 at the market open.Musk said last year that he didn't want to raise capital and that Tesla could become financially self-sufficient even as some analysts argued that a new round of fundraising would strengthen the company's balance sheet and ease investor concerns. Musk indicated a willingness to raise new capital, however, following a $700 million loss in its first fiscal quarter of 2019 that left the company with $2.2 billion in cash.“At this point, I do think there is some merit to raising capital,” he said during Tesla's first-quarter earnings call. “This is probably about the right timing.”Have you worked for Tesla？ Do you have a story to share？ Contact this reporter at mmatousek@businessinsider.com.Read more:Tesla is finally raising capital — and it's about timeElon Musk owes $507 million to banks helping Tesla raise capitalTesla's infotainment system is better than any other auto brand's, according to Consumer ReportsFidelity is the latest institutional investor to trim its Tesla stake