The striking thing about Thursday morning’s announcement from Tesla Motors Inc. (NASDAQ: TSLA) that it plans a secondary offering of about 2.4 million shares of common stock (including the underwriter’s option) is that the shares traded higher after the announcement. Typically, an announcement of a dilutive offering leads many investors to dump shares.

Tesla does not ever seem to have had that problem. Since coming public in late June of 2010, the company raised capital several times:

• On June 3, 2011, 5.3 million shares were sold at $28.76 to raise about $150 million. Shares were priced at the closing price for the day before the sale and ended the day up nearly 4.8%.
• In October 2012, the company raised more than $300 million in a further secondary stock sale.
• In May of 2013, Tesla raised more than $400 million in another secondary offering, along with another $450 million in a bond sale. Proceeds from the sales were used to prepay the company’s $465 million loan from the U.S. Department of Energy.

In all prior sales, the company’s founder and CEO, Elon Musk, acquired more shares, taking 1.5 million shares in 2011 (about $43 million worth), $1 million worth in the 2012 sale and $100 million worth in the third. Musk has indicated that he will acquire a further $20 million worth in the sale announced Thursday morning.

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That Musk is willing to load up on shares in secondary sales is a plus, but it is not the main reason for the share price gain whenever Tesla issues new shares. Put simply, demand for the stock is stronger than demand for the vehicles. For one thing, since its IPO at $17 a share, the shares have appreciated by about 1,200%.

Depending on what an investor believes, that share price increase proves either that there’s a sucker born every minute or that Tesla is the growth stock of the 21st century. You pays your money and you takes your chances.

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