With the first US automotive IPO in 50 years, Tesla has priced over 13,300,000 shares of its common stock at $17 per share. What are your predictions for the stock? PALO ALTO, Calif., Jun 28, 2010 (BUSINESS WIRE) -- Tesla Motors, Inc. (Nasdaq:TSLA), a manufacturer of highway-capable fully electric vehicles and electric vehicle powertrain components, today announced its initial public offering of 13,300,000 shares of its common stock at a price to the public of $17.00 per share. The shares will begin trading on Tuesday, June 29, 2010 on the NASDAQ Global Select Market under the ticker symbol "TSLA." Of the shares in the offering, 11,880,600 shares are being offered by the company and 1,419,400 shares are being offered by selling stockholders. In addition, the selling stockholders have granted the underwriters a 30-day option to purchase up to an additional aggregate of 1,995,000 shares of common stock to cover over-allotments, if any. Tesla will not receive any proceeds from the sale of shares by the selling stockholders. Via Marketwatch Photo credit gregpc on Flickr
I'm thinking it will bounce around a bit, the high point will be in about a month and then it will stabilize and slowly drop, probably to less than $17, pending any major news. That's my prediction anyway.
That won't matter though. Tesla's goal was to raise capital to help build their new factory. They had a very successful raising of capital. The company can now continue forward with their plans. (Yes, keeping investors happy is important, but this initial $17 was VERY important because that money goes directly into the company to fund the factory, R&D, and operations)
I bought some today at $18.85 and sold it using a trailing stop at $21.00. Not too bad for 34 minutes
Tesla's CFo would not want an IPO price of $17 if he knew it was going to fall 41% Toyota is buying $50 million worth of their IPO and some of the initial offering has been committed at that price. But the IPO price is generally set for a huge rally and not the opposite.
Well, most of it does. I'm sure there are brokerage, legal, and accounting fees to consider. Together with Toyota's involvement, I'm hoping Tesla can make serious inroads with electric vehicles. I don't even want to think about Toyota pulling a GM by shutting them down.
For reference, here's the IPO last fall of A123, a lithium ion battery maker for EVs, and one of the few pure-play EV options. (It's on an up-swing now - time to buy?) AONE: Basic Chart for A123 Systems, Inc. - Yahoo! Finance
Keep in mind several other factors; Toyota bought a $50 million stake in Tesla last month, and they recently announced Tesla will buy the old NUMMI plant left idle after GM went through government/union takeover last year and Toyota moved the Tacoma production to San Antonio. So, Tesla will now have a dealer network (Toyota national, Toyota SE, and Gulf States Toyota) that they could NOT get when major dealer conglomorates kept them out of states like Texas. They will also have a factory, with tax incentives from near-bankrupt California, and access to a dealer network. At this rate, they could easily be the Apple (iPod) of the car manufacturing business. It will probably take 2-5 years, but they could easily hit $100/share when they bring a true mass-produced 60-80 MPG sedan to the market, sell it in large states other than California, and price it to undercut the VERY expensive Chevy Volt and the short-range Nissan Leaf. Joe
That would be awesome. When the Tesla Roadster becomes affordable, I want one. I could buy a pre-owned one, but with the huge waiting list, I'm sure they hold their value very well. At first, I had wanted a hybrid Tesla, but now that I see people driving along Camp Pendleton to work (I live in OC and work in San Diego) in Tesla Roadsters (presumably charging during the day while they work), I am now confident the range will work for me. (I could rent a Prius 2-3 times a year when my friends and I go on roadtrips to go camping in national parks - or just let one of my friends drive their car) If Toyota could get that type of range with a PHEV or series hybrid Prius or Yaris, I would be interested.
1. Tesla doesn't build hybrids. They build EVs. I suspect Hell will freeze over before Tesla sells a hybrid. 2. The only wait for a Roadster is the time it takes to build your order. There is some inventory sitting on the floor for immediate delivery. 3. I doubt any low production car can be labelled "affordable".
Remember it is hard to make predictions about tomorrow based upon the dynamic factors of today. We've seen gas go from $4 to $1.80....in the same year (2008). Yet, today's dynamic of stable, cheap gas prices have truck and SUV sales back to nearly pre-2008 levels. Meanwhile, I just bought a one-year old Camry hybrid with 11,000 miles for 58% of its' original MSRP. That shouldn't be possible, but it is.....for now. Throw in a government money grab under the guise of reducing carbon emissions that adds 10-50% to the price of gas, and any other government manipulation of the market, and we could wake up tomorrow to a totally new ballgame. So, when guessing the future of Tesla, what you really have to ask is: 1. Will the price and supply of oil remain stable? Yes or No 2. Will the tax structure on cars, fuels, roads and insurance remain stable? Yes or No 3. Will the economy improve enough to counter any anticipated cycle of DEflation then hyper INflation? Yes or No 4. Will any significant changes in the first three drastically change or modify the whims of the car-buying public? Yes or No Based upon the last few years, I think betting 'No' on the first three and a yes on number four is a safe bet. Joe
