Tesla Motors Inc (NASDAQ:TSLA) Dilutes Shares Further, Sets $640M IssueAuthor: Victor AlagbeLast Updated: March 12, 2020 Tesla Motors Inc was in the news yesterday after it was reported that the firm wanted to sell $500M worth of stock. The $500M stock offering was necessary, as the firm needed money to fund itself going forward. Now, Tesla says it doesn’t want $500M and it has raised the stock offering to $642.5M.The Wall Street Journal reports that Tesla Motors has increased the size of its stock offering from $500M to $642M. The EV maker initially planned to sell 2.1M shares but now it would sell 2.69M shares at an offering price of $242 per share.With the initial 500M offer, Tesla would have made about $565M if the underwriters exercise an option to purchase more shares. With the new offering, Tesla could raise as much as $750M (same as the amount that was raised in June through debt) if the underwriters exercise their option.Smart move, positive responseCEO Elon Musk plans to buy $20M worth of stock in the offering and the gesture is certainly showing that Musk is putting his money where his mouth is. Musk says the move to raise money by selling shares is smart “as a risk-reduction measure”.Analysts also consider the stock offering a smart move as S&P Capital IQ analyst Efraim Levy says “Tesla’s (offering), combined with existing credit lines, will provide the company with more than enough cash for operational purposes into 2016,”The news of the original $500M stock offering was met with positive response as the shares of Tesla Motors rose in the trading session before rising another 1% in pre-market trading today. It appears that the raising of the stock offering is also sitting well with investors as the stock adds another 1.09% to a trading price of $245.16 as at 11:15AM EDT.Money matters at TeslaTesla Motors shares has dropped by almost 10% since it reported second quarter results and the stock only started heading back north after the news of the stock offering yesterday.The firm has been burning cash on its new models of EVs, energy storage and Gigafactory venture. For instance, in the second quarter, the firm spent $359M as its total cash dropped from $2.7B last year to $1.2BTesla obtained a $750M credit line in June and some sections of the market wondered if it was time for investors to be worried. The fact remains that the shares of Tesla are overvalued and the firm is far from fair valuation until it starts selling enough cars to reach break even projections.The logical thing for Musk to do when shares are overvalued is to issue more shares to pay off the loans. Apparently, Tesla has a crew of smart financial advisors and the firm should obtain some respite for its money matters after this offering.