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Tesla IPO Raises $226 Million
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.
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.
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.)
I have to admit though I'm a little disappointed they didn't get the stock ticker COIL.
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Nope, they stopped making the Roadsters, all work now is on the S-Sedan and licensing their Drivetrain technology to Mercedes and Toyota.
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).
Only the batteries are DC. The motor is AC and driven by an inverter in the car's Power Electronics Module.
One of our competitors trademarked the term "hypothesis". From now on, we will call them "boneheaded ideas".
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".
Learn the rules so you know how to break them properly.
www.teslabox.com
Only the batteries are DC.
Well its been a while since I have seen any AC batteries, so I guess that's why they went with the DC ones.
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Why would anyone want just another run of the mill "family car".
Obviously, there's a huge government conspiracy to make us think that people want "family cars". Heck, Wikipedia is claiming that a compact family sedan called the "Corolla" is the best selling car of all time.
If it's got > 2 functional seats, I ain't interested.
Sucker - I'm not interested unless it only has one functional seat and zero doors.
That particular episode of Top Gear is (especially) derided as FUD. The car never ran out of batteries, they never recharged the car (just an off the cuff remark about it taking 16 hours to charge from their windmill(!?)), and the 'brake down' that they reported was a blown fuse (not a drive train one either, just a regular one like could and does happen in every car). The put the car into neutral and pushed it off the track to 'show what would happen if you ran out of charge', obviously you could say the exact same thing about running out of gas on the track.
To me, that really brought to light just how much the people at Top Gear are biased towards the cars that they like and against the cars that they don't.