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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 have to admit though I'm a little disappointed they didn't get the stock ticker COIL.
The enemies of Democracy are
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.