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Tesla Shares Take Breather But Future is Green

Stocks in this article: TSLA F GM

NEW YORK ( TheStreet) -- To say it's been a wild few months for Tesla Motors (TSLA) would be an understatement: The blowout earnings; CEO Elon Musk's tweets; the drastic run up in shares. All of this and more has allowed Tesla to raise more than $1 billion in the marketplace, allowing one analyst to boost his price target despite have already raised it earlier this week.

Morgan Stanley analyst Adam Jonas raised his price target to $109 from $103 after Tesla raised $1.02 billion in debt and equity offering that was hyped more than than anything in recent memory.

Tesla fell 0.8% to $91.50.

Tesla priced the 3.39 million share equity offering at $92.24 a share, a penny below Thursday's close. Tesla originally announced it was selling 3.1 million shares as part of the capital raise, with Musk buying $45 million worth of the offering. Musk also bought $55 million from Tesla in a private placement.

The debt portion was raised twice, showing just how strong the demand is for all things Tesla, with the company eventually selling $600 million in convertible debt, up from an initial proposal of $450 million.

Jonas raised his price target to $103 earlier this week when he called Tesla America's fourth automaker, and now he's making it Morgan Stanley's top pick in U.S. autos.

"The auto industry may be in for a shock," Jonas wrote in a note. "While Tesla has a long way go, and tremendous risks remain, we may be witnessing an interplay of technology, industrial strategy and capital not unlike Cornelius Vanderbilt and the railroads, or Thomas Edison and electrical distribution." He wants to know whether traditional powerhouses such as General Motors (GM), Ford (F), Toyota (TM) and others are going to be the dominant players in the electric car industry, or whether Musk's Tesla is the winner.

The fact he's asking this question (and he doesn't have an answer) is an testament to what Tesla has achieved in such a short time. The company is now profitable for the first time in its 10-year history, and this capital raise allows the Palo Alto, Calif.-based manufacturer to showcase the strength of its brand.

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