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Tesla faces a long road over the next year to bring its more-affordable Model S (pictured) luxury EV to market.  (Source: Tesla Motors)

Tesla's only current revenue comes from its modest Roadster 2.5 EV sales.  (Source: Tesla Motors)
Stock is still sailing high above the IPO price, though

Following a pessimistic report by CapStone Investments analyst Carter Driscoll, in which he rated Tesla Motors Inc. as a "sell", investors went on a mini-selling spurt, depressing the electric vehicle maker's shares to around $25.20 -- a drop of 21 percent. 

Mr. Driscoll comments, "Right now the risks outweigh positives."

The big drop was followed by a slightly recovery, as shares today have climbed to around $26.20.  Concerns about the EV maker's fate are far from over, though.

Tesla is racing to try to introduce its Model S mass-market electric vehicle, an entry-level luxury vehicle that will be priced at approximately $57,000 USD before any applicable tax credits.  With tax credits, the vehicle's price could dip to $50k or less.

The company is hoping to deliver the vehicle in just over a year -- with the first orders being delivered sometime in early 2012.  The vehicles, assembled at what used to be Toyota's NUMMI plant in California, will be able to travel 300 miles on a charge.  Tesla is also targeting sportier performance than its established foes, which include General Motors, Ford, and Nissan.

The investment required to developed the advanced vehicle is immense and has caused the company to once again become unprofitable, despite shipping modest numbers of its current-generation Roadster EV.  With founder and CEO Elon Musk already cash-strapped from his investments in his other company -- Space X -- it remains to be seen whether the company has enough charge in its packs to reach its destination.

Nonetheless, the share price still indicates cautious optimism, as the IPO price was $17, meaning that the current share price is at a premium of approximately 55 percent.  Monday's drop-off was similar to that in recent months of networking giant Cisco, who similarly suffered from unfavorable analyst reports.



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Get out now!
By TheDoc9 on 12/28/2010 4:35:54 PM , Rating: 5
Drop on 'uncertainties' lol. Probably a big share holder dumping his stock and the other day traders following suit haha.

The funniest paragraph in this story is the last basically saying 'hold on to your stock, don't worry, everything's ok' - while the stock continues to lose value.




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