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Tesla IPO Raises $226 Million

Posted by kdawson on from the ok-fine-but-when-will-they-fly dept.

An anonymous reader writes "Tesla, which will trade under TSLA on Nasdaq, has been priced at $17 per share, allowing the electric car start-up to raise more than $226 million in its IPO. Investors were expecting the share price target range to be between $14 and $16 but the overflow of excitement saw Tesla increase the number of shares it plans to offer to 13.3 million, nearly 20 percent more than originally planned." Reader hlovy contributes a link from Xconomy.com summarizing the skepticism among some analysts as to how much staying power TSLA will demonstrate.

9 of 274 comments (clear)

  1. That Kramer guy... by Anonymous Coward · · Score: 1, Interesting

    Yes i actually watched the "Booyah" (?) shouting guy on CNBC last week. He was going on about how this was expected to shoot through the roof in the initial IPO but as a company faced too many hurdles (competition, public interest, etc.) to justify holding on to the stock long term. He said get in early, then get out early. Also, apparently some brokers make you hold IPO stock for 30+ days. He said basically don't use them then.

    And that's one to grow on.
    (The more you know?)

  2. That's a reversal by Mad-Bassist · · Score: 3, Interesting

    I distinctly remember them saying a few years ago they didn't want to go public with the company so they'd retain complete control.

    Maybe this is a good thing to grow the company, but will being beholden to the stockholders be a problem down the road?

    --
    "The only legitimate use of a computer is to play games." - Eugene Jarvis
  3. IPO: It's Probably Overpriced, but... by Anonymous Coward · · Score: 5, Interesting
    With the IPO at $17, and with it now trading at $20.50, some 20% higher than the already-raised IPO price, it really is probably overpriced.

    What makes TSLA an interesting business proposition (although not, for me, at $20+) is that if (and it's a huge "if") they can get production up and running in a timely fashion, they really do stand to reform the auto industry.

    The old model - manufacturers sell to dealers, and dealers sell to end users, but the dealers are franchisees who actually have no real relationship with the manufacturer. Your GM dealer sucks? Your GM dealer's mechanic sucks? It all reflects poorly on GM, and what's worse (from GM's point of view) is that all the short-term gains made by shady dealers and overpriced service departments go to the dealer, not to GM. Dealerships are profit centers for the dealer, but often breakeven or even loss centers for the manufacturer.

    Tesla's model is new to the auto industry: manufacturer sells direct to consumer, and also owns the distribution network and the service departments. That's nothing new in high tech: Apple's made a fortune using that model. The "Apple Store" gives a retail presence, but the guy at the Apple Store doesn't really care whether you buy the thing on the spot or go back home and buy it through the website.

    Applying that model to cars is interesting - and potentially groundbreaking. In the case of the Big Three, the dealer networks were an albatross around the neck of the auto manufacturers. If Tesla's model works, Telsa won't need a network of thousands of independent dealerships, because the only function of the dealerships will be to provide test drives and occasional servicing. Dealerships will be profit centers, not loss centers, for the manufacturer.

    1. Re:IPO: It's Probably Overpriced, but... by Anonymous Coward · · Score: 1, Interesting

      I think that model will fail, and I think they bought into that model because they had little choice; I don't believe franchise dealers wanted their cars on their markets. You're not quite correct that manufacturers and dealers have little relationship, they actually get locked into one brand, maybe two if they're big enough, per dealer. No franchise dealer would risk themselves on a startup so they were forced to use their own dealerships (my analysis of their situation, not necessarily true).

      What Tesla should do is what Qualcommm did. Qualcomm in the late 90's had the best cell phone technology with CDMA and tried to manufacture it but were simply too small to compete with the big phone manufacturers like Motorola or Erickson. So they sold off their manufacturing business and changed their business to one of technology development and licenced their technology to all the big manufacturers, and in the span of a few weeks the company's stock literally went up by a factor of 10 (only time I've ever seen an 8 for 1 stock split).

      Tesla's in the same boat; they have the best technology and a good package for it. It's far better than the Volt or the Leaf could ever hope to be. They should skip the manufacturing bs because the capital involved is too high, and instead license the technology to some big car manufacturers like Ford, Toyota, and Honda to compete with GM and Nissan. The big manufacturers win because they don't have to develop the tech, and Tesla wins because the big manufacturers have manufacturing assets in place to build on a large scale to keep production costs down. I might buy the stock on the hopes they'll do that; if they do their stock will skyrocket just like Qualcomm did.

    2. Re:IPO: It's Probably Overpriced, but... by TooMuchToDo · · Score: 3, Interesting

      After I saw your post I decided to check the stock price (thanks!). 2120 shares bought at $18.43 and the stock is already at $23.89. Not a bad day.

  4. Isn't that half... by ducomputergeek · · Score: 2, Interesting

    What the company got in the form of government loan from the stimulus package (seems like $544M was the number I remember of the top of my head). Also, isn't the CEO about broke?

    --
    "The problem with socialism is eventually you run out of other people's money" - Thatcher.
  5. pessimism about EV cars or Tesla as a company? by sshir · · Score: 4, Interesting

    I think Warren Buffett said that as a rule companies which pioneered most revolutionary technologies, those which changed our lives in profound ways, didn't make money for original investors... Especially in transportation (think airlines, car companies etc.)

  6. Only One Thing I Dislike About Tesla Motors... by damn_registrars · · Score: 2, Interesting

    Their cars run on DC motors (or at least get power from a DC source). Yet the company is named after a man who is acknowledged as the father of the alternating current (at least in the US).

    Otherwise I think they have a fine product (although I cannot afford it) and I hope them well. Furthermore if the company name helps to make Nikola Tesla better known in this country, I think that would be great as I view Tesla as amongst the greatest scientists to ever work in the US.

    --
    Damn_registrars has no butt-hole. Damn_registrars has no use for a butt-hole.
    1. Re:Only One Thing I Dislike About Tesla Motors... by nido · · Score: 4, Interesting

      Only One Thing I Dislike About Tesla Motors... Their cars run on DC motors (or at least get power from a DC source). Yet the company is named after a man who is acknowledged as the father of the alternating current (at least in the US).

      /methinks Tesla himself would be disappointed that "Tesla" Motor's cars require batteries, when his Black Magic Touring Car ran on free energy delivered through a "dozen vacuum tubes -- 70-L-7 type -- and other electrical parts".

      Around the turn of the century Tesla concluded that it would be possible to transmit electrical power without wires. To optimise results, he chose to experiment at high altitude, where the air was thinner and therefore more conductive. As a result he ended up building a research laboratory in Colorado Springs where he conducted some of his most extraordinary experiments; tests that even to this day are shrouded in mystery. Tesla theorised that unlimited amounts of power could be transmitted anywhere on earth, without wires and with virtually no loss of energy. It is not clear exactly how he intended to do this, but right up until the end of his life he maintained that it was quite possible and that he only needed sufficient funds to make it a reality.

      The funds however were not forthcoming, and Tesla was eventually forced to abandon his Colorado experiments in what was to become a recurrent feature in his life; no money or insufficient finance to pursue an idea . . . but a constant stream of new ideas.

      -Nikola Tesla: Maverick, Visionary and Master of Light

      --
      Learn the rules so you know how to break them properly.
      www.teslabox.com