Tesla stock surged on Thursday and continued to rise on Friday as analysts praised the company for diluting shares less than they had thought it would.

Tesla stock
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Meanwhile, Goldman Sachs analysts offered up some feedback on their recent downgrade of it to Sell, and so continues the saga that found the investment bank upgrading it about a year ago right before the announcement of an offering that it was underwriting — only to downgrade it to Neutral a few months later.

Tesla announces capital raise

Tesla sold over 1.3 million shares for $262 apiece to raise over $350 million in the capital raise it announced earlier this week. The company initially said it would sell 980,000 shares, but apparently, investors aren’t worried about that. In most cases, shares of a company fall after they announce a capital raise because of concerns about dilution from the sales of the additional stock. In this case, however, Tesla stock rose by more than 2% on Thursday.

The EV maker had planned to raise $1.15 billion in total equity and convertible debt, including the extra option for the underwriters on this offering. Of that total, $250 million was expected to be equity, while $750 million was expected to be convertible debt. Underwriters were granted a 15% over-allotment provision.

Tesla downgraded to Sell

In a research note dated March 17, Goldman Sachs analyst David Tamberrino shared some feedback on his recent downgrade of Tesla stock to Sell. He also made some small adjustments to his model and boosted his six-month price target on the shares from $185 to $187 per share.

He described the debate over his downgrade as “healthy” and the feedback about it as “mixed.” He said investors who are bullish on tesla stock aren’t worried about the headwinds the company faces right now and are focused on the Model 3 reaching volume production over the next couple of years. They’re also not worried about SolarCity detracting too much from the company’s total equity even though it’s not expected to be much of an engine for growth. They also see a way for SolarCity to reduce its fixed cost and improve its cash flow.

On the other hand, Tesla bears are “frustrated with limited visibility into how to monetize a short position in a name that is highly-levered to terminal value.”

Tamberrino said the company ended up not raising as much capital as he had expected, so the up-front share count dilution was not as bad as he had expected, which is why he bumped up his price target for Tesla stock.

Tesla looks good… in 2020

Tamberrino isn’t the only one who noted that Tesla didn’t raise as much capital as he had expected. Guggenheim analyst Rob Cihra told CNBC‘s Power Lunch on Thursday that the amount the company raised as “pretty darn small when it comes to dilution. He also said that although Tesla stock looks expensive and risky right now, that’s not what’s really important. He feels investors should value the EV maker more on what it can provide in 2019 or 2020 rather than what it’s doing right now, even though “that may in some ways sound silly.”

Cihra doesn’t feel that future changes to federal or state tax credits for electric vehicles will have any impact on EV sales because he believes people want to buy EVs whether or not they will get tax credits.

Shares of Tesla stock rose by as much as 1.08% to $264.87 during regular trading hours on Friday.