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Tesla
Posted on 6/28/10 at 2:22 pm
Posted on 6/28/10 at 2:22 pm
I don't envision this ending well for investors:
"The company has yet to make a profit, and does not expect to do so until the $50,000 Model S sedan starts selling in significant volume. As of March, it had sold a little over 1,000 of its trademark $109,000 Roadsters.
"The equity markets are a bit fickle and this is somewhat of a speculative deal, given the company doesn't generate any profits. So I think at the margin the firm may not be able to go out there with some blockbuster size of a deal," said Morningstar IPO analyst Michael Gaiden. Institutions, however, may want some exposure to this "revolutionary-type name," he added.
Despite the considerable risks facing Tesla, the company is generating enthusiasm among investors, and the shares could price above the $14-$16 range.
Investors are indicating a willingness to pay around $17 per share, IPO Boutique senior managing partner Scott Sweet said.
The IPO represents about 14 percent of the company, excluding additional shares the underwriters have an option on. At $15 a share, Tesla would have a market capitalization of $1.4 billion.
Tesla's losses widened to $29.5 million for the quarter ended March 31, from $16 million a year earlier.
The company's business plan is fraught with risk. Tesla has said in regulatory filings that it faces a production gap in its Roadster after 2011 due to tooling changes at a supplier.
Musk, talking to investors last week, said Tesla was closer to Silicon Valley giants than traditional automakers.
"We are a Silicon Valley company. Closer to an Apple or Google than to a GM or Ford in the way we operate the company," he said."
Really, because more like GM Musk is broke right now. I totally believe he is misrepresenting the company. Seriously, dude, you are making very high priced electric cars. What's the total market for the $109k model and the follow-on Model S $50k car? So investors willingly pay $17/sh, and will allow themselves to be diluted with the increased offering, but wouldn't pay a higher PPS, I don't get it. Then again I don't buy IPO's.
LINK
"The company has yet to make a profit, and does not expect to do so until the $50,000 Model S sedan starts selling in significant volume. As of March, it had sold a little over 1,000 of its trademark $109,000 Roadsters.
"The equity markets are a bit fickle and this is somewhat of a speculative deal, given the company doesn't generate any profits. So I think at the margin the firm may not be able to go out there with some blockbuster size of a deal," said Morningstar IPO analyst Michael Gaiden. Institutions, however, may want some exposure to this "revolutionary-type name," he added.
Despite the considerable risks facing Tesla, the company is generating enthusiasm among investors, and the shares could price above the $14-$16 range.
Investors are indicating a willingness to pay around $17 per share, IPO Boutique senior managing partner Scott Sweet said.
The IPO represents about 14 percent of the company, excluding additional shares the underwriters have an option on. At $15 a share, Tesla would have a market capitalization of $1.4 billion.
Tesla's losses widened to $29.5 million for the quarter ended March 31, from $16 million a year earlier.
The company's business plan is fraught with risk. Tesla has said in regulatory filings that it faces a production gap in its Roadster after 2011 due to tooling changes at a supplier.
Musk, talking to investors last week, said Tesla was closer to Silicon Valley giants than traditional automakers.
"We are a Silicon Valley company. Closer to an Apple or Google than to a GM or Ford in the way we operate the company," he said."
Really, because more like GM Musk is broke right now. I totally believe he is misrepresenting the company. Seriously, dude, you are making very high priced electric cars. What's the total market for the $109k model and the follow-on Model S $50k car? So investors willingly pay $17/sh, and will allow themselves to be diluted with the increased offering, but wouldn't pay a higher PPS, I don't get it. Then again I don't buy IPO's.
LINK
This post was edited on 6/28/10 at 2:26 pm
1
Posted on 6/28/10 at 2:28 pm to tirebiter
You'd see these occasionally in Palo Alto. Fun looking little cars. From what I heard they were able to secure quite a bit of funding, and their R&D can't have been cheap. Their business model is a little better suited to 2007 than 2010 though.
Posted on 6/29/10 at 1:44 pm to Cold Cous Cous
They raised about $266 million. To this date they have sold a smidge more than 1,000 cars. That's one hell of a ratio. 
LINK /
LINK /
Posted on 6/29/10 at 4:53 pm to Cold Cous Cous
Look, even the tax payers got in on the act pre-IPO:
"Tesla doesn't just have the backing of the successful Musk. Earlier this year, Tesla borrowed $465 million from the Department of Energy to fund production of the Model S."
In another article Musk said if the company was only making the sports car version the company would be profitable already. Okie, dokie.
This whole thing smells of pre-revenue tech co's going public during the heyday of the tech bubble. Pump and dump is still alive and well, surprised TSLA didn't hire Blodgett to shill for them.
"Tesla doesn't just have the backing of the successful Musk. Earlier this year, Tesla borrowed $465 million from the Department of Energy to fund production of the Model S."
In another article Musk said if the company was only making the sports car version the company would be profitable already. Okie, dokie.
This whole thing smells of pre-revenue tech co's going public during the heyday of the tech bubble. Pump and dump is still alive and well, surprised TSLA didn't hire Blodgett to shill for them.
Posted on 6/29/10 at 5:01 pm to tirebiter
I've always thought their issue was capacity-related. If they could get cheaper mass production from one of the 50 jillion abandoned car factories (which btw, they have), they could/should be able to take advantage of those economies of scale and sell the cars at more reasonable prices. I'm still surprised they IPO'd this early in though. Maybe that's just me wanting to believe a tech-laden car company can succeed in becoming an successful industrial endeavor and help change the face of the auto business in the US.
Posted on 6/29/10 at 5:26 pm to kfizzle85
Musk is broke, the DOE deal requires him to retain "x" ownership in the company. The company is dead broke, Musk needs personal money and capital = IPO time although he will say he is just illiquid and has assets. I am not wishing failure on the venture, just think it takes a crazy person or institution to buy into the IPO. Have you seen how many tiny batteries are in the sports car version? Surely there is better technololgy, high flow capacitors, nano tech, whatever---that is why I was laughing to myself when he compared the company to Google. Beyond the initial cachet status seekers I don't know anyone willing to throw down $107k on a car that will run about 20 miles or so my recollection of duration of charge.
This post was edited on 6/29/10 at 5:28 pm
Posted on 6/29/10 at 5:31 pm to tirebiter
Agreed on all of that for sure.
Posted on 6/30/10 at 9:53 am to kfizzle85
corporatism?
Posted on 6/30/10 at 10:07 am to RollTide4Ever
'Dippin' In My Tesla' [LINK]
Posted on 6/30/10 at 1:59 pm to kfizzle85
38% profit since the IPO is pretty legit.
I'm still not buying it.
I'm still not buying it.
Posted on 6/30/10 at 2:17 pm to TheHiddenFlask
I thought they also receive a subsidy for these cars. What happens when that runs out?
I don't know why they can't roll out the sedans.
I got in the sports car and it is hard to get in and out of. Not sure if you would survive a crash in that car.
There is more leg room and comfort in other sports cars.
I don't know why they can't roll out the sedans.
I got in the sports car and it is hard to get in and out of. Not sure if you would survive a crash in that car.
There is more leg room and comfort in other sports cars.
Posted on 6/30/10 at 2:27 pm to tigerfan4444
saw one last ngiht on Charles Street in beacon Hill in Boston...
Posted on 6/30/10 at 2:40 pm to TheHiddenFlask
quote:
38% profit since the IPO is pretty legit. I'm still not buying it.
No different than many IPO's follow-on performance, then the dumping occurs. It always begs the age old question as to why the shares weren't priced more accurately to begin with.....still think it is a suck hole waiting to happen. I certainly would not be stroking a check for a $55k sedan with unproven technology. Then again, that's just me.
Posted on 6/30/10 at 2:41 pm to tirebiter
quote:
It always begs the age old question as to why the shares weren't priced more accurately to begin with.
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