• Jun 29, 2010

Tesla Model S – Click above for high-res image gallery

A lot of analysts were bullish on Tesla's initial stock offering, and a report from Bloomberg proves that the electric car start-up is a buy with the investors of the world. Tesla reportedly raised $226 million with its IPO, or 13.3 million shares at $17 per. The $226 mil total went above and beyond the high-end figure of $16 per share.

The news has to come as a pleasant surprise for Elon Musk, the company's CEO and largest shareholder. Musk has reportedly spent $70 million of his own personal fortune propping up Tesla while the company's losses mounted. The successful IPO is even more surprising given the fact that the company has yet to turn a quarterly profit and lost a substantial $230.5 million since 2003. Even at the expected median price of $15 per share, Bloomberg data shows that Tesla was valued at 5.5 times its net tangible assets, which doesn't exactly sound terrific. Tesla's IPO was likely helped out by recent investments by Toyota and Daimler, giving the first U.S. automaker IPO in over 50 years some much-needed street cred. Interestingly, Tesla is the first U.S. automaker since the Ford Motor Company to throw its hat into the public stock ring, with the Blue Oval doing so way back in 1956.

Tesla's IPO was considered a bit of a crap shoot given the recent failures of other stock offerings coupled with the fact that the EV maker doesn't have a lot of product to make it an attractive buy. Tesla has managed to sell about 1,000 copies of its pricey roadster, but now that the First-on-the-Block crew has theirs, the battery-packed two-seater isn't exactly flying off the shelves. The Model S sedan, which will reportedly go 160 miles on a single charge, won't arrive until 2012 at the earliest.

*UPDATE: Shares are now trading some 40% higher than they initially traded at. Read the full story here.



[Sources: Bloomberg via BusinessWeek]


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  • 20 Comments
      • 4 Years Ago
      I'm as skeptical as anyone on this...but deep down I really want to see them turn into something big.

      Not quite ready to give them my money yet though.
        • 4 Years Ago
        My thoughts exactly. I want them to succeed, but I haven't seen any evidence that they are anything more than a glorified kit car builder. And there are plenty of better glorified kit car builders out there.
        • 4 Years Ago
        I want to know if they get toyota financing, with out a lease program they will never be successful in the US, ie: lotus
        • 4 Years Ago
        Tesla is certainly a high risk investment, but it appears that investors are still recognizing the potential of the electric vehicle, and see Tesla as their best bet, even though it's still quite a high risk investment.

        A poor IPO showing would have virtually ruined the company, so this is definitely good news for the electric car.

        @jrm,
        I'm with you. I'm not quite sold on the company's viability, but hey, my father already wants a Tesla S, so maybe there's something we don't know.
        • 4 Years Ago
        Most investors would tell you not to invest in IPOs in most cases. of course there are exceptions mot that people look at and say O you could have invested this much in microsoft and made..... hindsight is 20/20 and all but most of the time IPOs are not a good investments. but keep an eye on it and buy in after the value settles a bit.
      • 4 Years Ago
      Right now, everyone is gung ho to be "green" and are willing to throw money at just about anything in the excitement. I see a lot of parallels in these new "green" companies and the .com tech bubble. Many of the people who know the technology are often poorly resourced on the business side and fail because they can't make a workable business plan. That killed 90% of the .com companies.

      Tesla has been hugely unprofitable and they need to change that quickly because now they are accountable to shareholders. That is the risk and burden with an IPO

      Tesla at least is making a product (unlike the majority of others who are still vaporware) therefore they might have a chance. But the clock is ticking.
      • 4 Years Ago
      that money will keep the furnace going.. with no dealer network and slow sales they are dead in the water and will continue to burn cash.
      • 4 Years Ago
      Wow, that's awfully kind of investors to donate $226 million. Although I wish the best for Tesla and electric cars in general, investing in a deflating bubble seems like a rather dubious business move.
      • 4 Years Ago
      The biggest problem with Tesla is the fact that other much larger companies are all fighting towards an electric car, GM and Nissan especially. Even if they come out with a decent car it wont be at a price point to be a big seller. Im a little shocked they could raise that much money considering they have sold all of what? 1000 cars roadsters?
      • 4 Years Ago
      Is Tesla the "T" in PT Barnum?
      • 4 Years Ago
      It will be interesting to see if they can actually make a product that can turn a profit at a reasonable price.
      • 4 Years Ago
      Well...now that his ex knows he's no longer 'broke' per the last statements he made I wonder what she'll go after.

      After all their partnering with Toyota im mixed on the company itself; good ideas, mildly cool cars, but maybe reaching for the stars a bit too soon.
        • 4 Years Ago
        The soon-to-be ex Mrs. Musk must be pleased. I would council her to sell her shares ASAP, before people realize just how incompetent Tesla is.
      • 4 Years Ago
      I just don't believe Tesla can offer the Model S sedan at around 50K when we see what it is costing Nissan and GM to bring out the Leaf and Volt respectively and these companies have economies of scale.

      If they bring the Model S, it will probably cost north of 90K.
      • 4 Years Ago
      Ah, Elon--made billions off of PayPal, and lost it all building an electric car that no one can afford. Good job, Sir!
      • 4 Years Ago
      That should be 300 miles on a single charge for the Model S.
      • 4 Years Ago
      A year ago some were saying that Tesla was worth $1billion, or $550million, now the truth.
      http://www.autoblog.com/2009/06/17/report-tesla-motors-valued-at-1-billion/

      Don't... don't... don't believe the hype.
        • 4 Years Ago
        What? Did you read the article at all?

        The $226 million is the money raised during the IPO through the sale of shares, not an estimate of the company's worth. The stock is currently trading above $18/share, which would give Tesla a market capitalization and implied net worth of roughly $1.7 billion, THREE times your lower estimate.

        http://af.reuters.com/article/energyOilNews/idAFN2913216020100629

        So if there's any "truth," it's that the hype is still plenty there, but obviously investors have a lot of interest in the EV, and see Tesla as their best bet right now.
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