Tesla IPO Launches Unexpectedly High at $17/Share, Company is Worth $1.33B USD
June 29, 2010 3:05 PM
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Tesla's upcoming Model S entry-level luxury EV
The Tesla Roadster
(Source: Drag Times)
IPO gives electric vehicle startup plenty of cash to work with
A vital chapter in Tesla Motors' history has now been written, with the company's first public stock offering. The epic success should help Tesla flourish in the short term and help its financially troubled founder, as well.
The stock release comes as the company prepares its entry-level Model S luxury sedan to bring electric vehicles to the masses. The compan also is working on plans for a
, which is being phased out, an electric SUV/crossover, and an electric van.
Propelled by these ambitious plans the company's
entrance into the world of public trading
proved an emphatic success. The company raised over $226M USD from share purchases. Shares, which were expected to sell from between $14 and $16 sold for approximately $17. Additionally, where initially the company planned to release around 11.1 million shares, it was able to offer 13.3 million shares at this higher cost.
The initial public offering was the first for a U.S. automaker since Ford Motor Co. in 1956. That IPO was
with 10.2 million shares sold, raising nearly $660 million (in 1956 dollars).
Still the Tesla Motors IPO was a tremendous success and should give the young company the money it needs to thrive. Tesla initially expected to get less than half of the sum it pulled in, initially seeking only $100M USD from stock purchases.
The IPO will also prove vital to Tesla Motors founder and CEO Elon Musk. Musk says he's
virtually out of money
. Musk, who invested $70M USD in Tesla, sold 909,212 shares raising $15.3M USD in much-needed cash.
His stake now drops from 36 percent to 28 percent after his sale. It should be noted that Tesla Motors as a whole only unloaded 17 percent of its shares to the public. That means that it is still primarily held by private owners -- the largest of which is Musk.
That also means that Tesla is now valued at roughly $1.33B USD, based on the price of publicly traded shares.
Stock has since risen to over
$21.50 a share
, earning those who purchased it initially, a healthy 25 percent gain. That price will likely drop somewhat on profit taking, but its certainly a promising sign for this new star.
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6/29/2010 3:49:54 PM
I am happy for the Tesla people. If their vision is proved correct, they will be wealthy, and that is how it should be, in my view.
But as for me investing in Tesla's vision, no thanks. I am old enough to remember another "great" technology company a few years back. They designed a state-of-the-art business aircraft called the Learfan that was really quite revolutionary. Lots of very smart wealthy people sank tens of millions into the project. They all lost their shirts.
But good luck to Tesla. I'll be watching to see if they survive.
6/29/2010 4:20:58 PM
major difference between these two companies, based on what wikipedia quickly told me: Tesla has already proven able to produce road-worthy cars that live up to the company's promise. According to Wikipedia, LearAviation never delivered an acceptable product to the U.S. market.
6/29/2010 6:14:34 PM
I think the important detail here is that Tesla doesn't depend only in itself to succeed: Battery technology has to improve considerably if their cars are to have a chance of becoming mainstream.
Regardless of the reality that most people drive under 40 miles/day, no one in their right mind would consider cars with such mileage/charging time limitations as their primary vehicle. Apart from a very few people willing to make sacrifices (or planning), that is.
When we start seeing batteries that can handle 300+ real-world miles, and charging in 15-30 minutes, I believe that's when things will be turning around. Especially because by then the technology will (probably) also be offered at a lower price point.
6/30/2010 1:15:24 PM
How about a car w/ 200 mile range in a 2 car household.
I would buy one (depending on price). Given the cost per mile is about 10% of gas. Just pretend you are paying $0.30 a gallon at the pump.
Our household has two vehicles. I would never consider getting 2 EV but 1 EV and 1 long range gasoline powered vehicle seems like a win-win.
How many times a year does a 2 car household need 2 vehicles with 300+ miles of range going in different directions? 0?
"Let's face it, we're not changing the world. We're building a product that helps people buy more crap - and watch porn." -- Seagate CEO Bill Watkins
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