Tesla Stock Up 3% On News Of $1.4B China Loan To Bolster Shanghai Gigafactory

American electric car maker Tesla’s stock hit $420 per share Monday for the first time, after rising more than 3.6 percent. Tesla stock is already up nearly 27 percent this year.

It is called a landmark because CEO Elon Musk proposed in 2018 that he had secured funding to take the company private at $420 a share although he later retracted that under pressure from investors and regulators.

Meanwhile, reports said the American electric vehicle maker will get a long term loan from a group of Chinese banks. It will be a new 10 billion yuan loan ($1.4 billion) for five-years to bolster the automaker’s Shanghai car plant.

According to a Reuters report, part of the loan will roll over a previous loan taken early this year. Among the lenders include China Construction Bank, Agricultural Bank of China, Industrial and Commercial Bank of China and Shanghai Pudong Development Bank.

The Chinese banks in early 2019 offered Tesla a 12-month loan of 3.5 billion yuan repayable on March 4, 2020, according to a filing by Tesla to the U.S. Securities and Exchange Commission.

The report said a portion of the new loan will be used to repay the previous debt and the rest will go into bolstering Tesla’s China operations. It also said Tesla and the China banks have not commented.

Tesla announced its Shanghai giga-factory in July 2018 and opened pre-orders for its Tesla Model 3 sedans in China that will be sold at a lower price than imported models leveraging the strengths of domestic production.

Tesla started producing some vehicles from its Shanghai plant and the target includes building 1,000 Model 3 cars a week.

Tesla marks a fairly good year

A report by CNN notes that gains by Tesla stock add to the company’s fairly good innings this year. In 2019, the company announced many new vehicles, including the Cybertruck, and an all-electric ATV.

The hyped Model Y will begin production in 2020. The new factory has opened in China and one more has been announced for Germany.

The financial performance had been mixed and ranged from a more-than $700 million loss at the start of the year and a profit in the third quarter.

In the latest update by Yahoo Finance says Tesla stock soared as much as 4 percent to hit $422.01 staying upbeat for a fourth consecutive day.

According to CNBC, Tesla’s market cap hit more than $75 billion with the new stock movement. It noted the aftermath of Musk’s “funding secured” tweet on Aug. 7, 2018, sent the stock soaring for a while and soon hit a turbulent zone.

Musk’s tweets about going private landed Tesla and the CEO in trouble after the regulator Securities and Exchange Commission objected to Musk's tweets and accused him of misleading shareholders. Musk had to pay the regulator $20 million as a settlement fee in October 2018 and had to renounce the position of chairman.

In the 16 months from Aug. 2018, Tesla stock bottomed out to a three-year low of under $177 in June and it has crossed $420 on Monday.