• Jun 29th 2010 at 5:59PM
  • 10
We can safely say very few people saw this one coming. By the close of trading today, Tesla stock was trading at $23.89 – up a hefty 40.53 percent from the stock's IPO price of just $17. If that's not surprising enough for you, how about this little gem: overall trading on NASDAQ was down by 3.85 percent today, meaning Tesla bucked the market trend for its first day as a publically traded company. This means that today, the company's 13.3 million publically traded shares are worth around $317.7 million, up from $226 million this morning.

Of course, a lot can change from one day to the next, and the real proof of how well Tesla fares will be over the next few months. With the Model S still well out on the horizon and the days of the Roadster numbered, the company may face mounting skepticism as it moves toward the future.

[Source: USA Today, Scottrade]
Photo by Brad Wood / Copyright ©2010 Weblogs, Inc.

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    • 1 Second Ago
      • 8 Months Ago
      I am certainly surprised. I expected the IPO to sell but not 66% above initial price.
      Tesla market cap now stands at 2.4bn$! two point four billion dollars for a money pit : )
      it's not even worth zero dollars yet this is how the market reacts : )

      on the one hand it's cool, on the other this is a huge bubble bound to burst. that is if there is reason in the stock market which is a pretty big if. just looking at the sale of skype, idiotically ridiculous prices are paid and both companies survive. some bubbles can be sustained however vacuous. but there is no way Tesla motors is worth 2.4bn$ in any real sense.
      if I were to guess, the initial IPO was fueled by oil money. more money than concern type cash. and then maybe the rise was fueled by small investors lured by the buzz around electrification wanting to be part of it with absolutely no uderstanding of the business involved. spanning the wealthy but not so bright right wing senior citizen casual douche bag right down to the joe sixpack ABG reader. 1000$ here, 100k there, price goes up and they buy even more : )

      no idea what will happen next. reason might set in over the next few days, initial buyers might try to cash out and stock drop to maybe 12. but reason doesn't seem to apply so anything is possible
      • 8 Months Ago
      I'm surprised it went that high. I'm very happy for them and I hope this opens up the floodgates so better EV and green energy companies can hit the equity markets.

      I would not TSLA though. No way.

      But overall, this is a great thing. Tesla better deliver now though . . . otherwise they'll close the equity markets to the other companies.
      • 8 Months Ago
      Anyone who didn't see this coming has never seen how an IPO has been floated for the last 15 years. The underwriters control the price and float size to ensure there is demand to cause a significant pop in the stock price. Because if you don't, your stock might never any attention and doing business nowadays seem to be all about marketing your stock!
      • 8 Months Ago
      This is great. With this IPO Tesla gets:

      1) More money it it's coffers. With Toyota's 50M and the U.S. government's 540M, they get enough to loose money until Model S.

      2) Get rid of the VCs who invested in them in the past 5+ years. Opfully they did the smart thing and replaced them with long-tern institutional investors (pension funds, family trusts, etc.).

      3) Fulfill a condition of the Toyota deal.

      The challenge now will be to provide Wall Street with a constant stream of good news to keep them from crushing the stock. If this happens, they will have to engineer a comeback in 2012, when Model S arrives, but they won't be able to borrow money in the mean time.

      I'll buy TSLA only after 2012 when they have a hot-selling product to bank on, otherwise it's too artificial...

      • 8 Months Ago
      It is not surprising that the price of Tesla stocks in the open market is higher than the price they were purchased for in the IPO. This is normal for any IPO from any company. That is typical of how IPO's are structured. Those who put in millions to directly purchase the IPO stocks expect to be able to book significant profits for their risk.

      Companies who are launching IPO's typically do not get open market value for their shares. They take less because of the structured arrangements of IPO stock purchase agreements. In exchange for getting scheduled, agreed upon share sales, Tesla takes less than open market prices. Sometimes these stock purchase agreements lock some IPO buyers into future purchases also.

      It's complicated, but in short -- nobody inside finance is ever surprised when an IPO stock jumps when it hits the open market. IPO's are structured to do exactly that.
        • 8 Months Ago
        @Spec Tesla has NOT lost money on every single Roadster. They have yet to turn a profit because of investing for the future and the Model S. Since the price increase Tesla has not lost money on Roadsters.
        • 8 Months Ago
        Well Nixon, no matter how you slice it, there had to be buyers out there that said "Yeah . . . I think Tesla is worth $2 Billion." Despite the fact that they've sold barely over 1000 cars. And lost money on every single one. And these are cars sold for over $100K!

        Yes, they structure them so they'll go up . . . however, demand for the stock is still required for it to work.
        • 8 Months Ago
        "This is normal for any IPO from any company."
        No it's not. It means Tesla left money on the table that went to the fat-cat crony capitalism IPO bankers. Ideally the stock would rise a respectable 5% for good press and good vibes, but any more is a financial error for the company. And sometimes the stock drops.

        WR Hambrecht came up with a better way, an OpenIPO auction that anyone can participate in and ensures everyone who's willing to pay the strike price or higher gets all the shares they want. Google and a few others have used it, but the fact-cat overpriced IPO bankers resist it.
        • 8 Months Ago
        That is how it is _supposed_ to happen, but in this economy, I don't think it was necessarily a sure thing.
      • 8 Months Ago
      I used to broker IPO share elections and yes this is virtually meaningless.
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