Tesla Motors IPO today

[goof2]

NEW YORK (CNNMoney.com) -- Tesla Motors will offer up its shares to the public for the first time on Tuesday, testing investors' faith in a company that has proven it can make functional and stunning electric cars but has never had a profitable quarter.

Tesla, which will trade on Nasdaq under the symbol "TSLA," priced its shares late Monday at $17 each, above the target range of $14 to $16. That allowed Tesla to raise more than $226 million in the IPO.

PayPal founder Elon Musk's seven-year old auto company lost $55.7 million last year and $260.7 million since its inception. The company has performed so poorly from a financial standpoint that Musk recently said he lost his entire personal fortune on Tesla.

But investors are giddy about the Palo Alto, Calif.-based automaker's initial public offering, prompting Tesla on Monday to increase the number of shares it plans to offer by nearly a fifth to 13.3 million.

Much of the excitement is pegged to Tesla's launch of the Model S, an electric sedan that the company says will sell for a minimum of $50,000 in 2012. That's much more reasonable and practical for most consumers than the vehicle that Tesla currently sells, the $100,000 Roadster sports car.

The electric automaker plans to acquire a plant where it will produce 20,000 new Model S sedans each year starting in 2012. That's a significant increase from the 1,063 Roadsters it has sold -- total. But until 2012, Tesla said it will continue to pile up hefty losses.

"Investors that are interested in Tesla know that it's going to continue to burn cash until it gets Model S into commercial production," said Matt Therian, an analyst at IPO research firm Renaissance Capital in Greenwich, Conn. "Tesla investors are really looking out to 2012, with their investment very much tied to whether they think 20,000 is a conservative or an aggressive number."

There are many reasons to believe in Elon Musk & Co. Musk made his name -- and fortune -- on the success of electronic payment company PayPal, which was eventually acquired by eBay (EBAY, Fortune 500). And his space exploration technology company, SpaceX, earlier this month launched the first successful, privately funded spaceship with the capacity for human space transport.

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.

Last month, Toyota (TM) announced that it will invest $50 million in Tesla and indicated that it would be interested in doing business with Tesla in the future. Tesla has also partnered with Daimler to develop an electric version of Daimler's tiny Smart cars.

Reasons to be skeptical
Still, some experts say that there are several reasons for investors thinking of buying Tesla's stock to precede with caution.

By Tesla's own admission, the Model S has just one operable prototype, no final design or manufacturing process. The company also has not completed its purchase of the plant in which it plans to make the new car.

As a result, Tesla's timetable for bringing the Model S to market may be a reach: After first being announced in September 2008, the company's plans to produce the Model S in 2012 is ambitious even for larger, established automakers.

"Most experienced automakers race to put a car together in three years," said Angus MacKenzie, editor of Motor Trend magazine. "I can't see Tesla making more than a handful of these -- if any -- in 2012."

That's not good news, considering Tesla has competition coming to the stage quickly. Nissan will sell the electric Leaf and General Motors is ready to bring the hybrid-electric Chevrolet Volt to market next year -- a year ahead of the Model S.

The Nissan Leaf is set to get 100 miles to the charge with just a $25,000 price tag (after tax credits). The Volt will get 40 miles to the charge, but will also have a gas engine, and it will be sold for about $35,000.

The Tesla Model S will have a variety of range options from 160 miles to 300 miles per charge, but at double the price of the Leaf, Tesla will likely remain a niche automaker for some time.

What's more, Tesla has just 12 dealerships to sell and service its vehicles, compared with more than 1,000 Nissan dealers and thousands of Chevy dealerships in the United States.

"I'm struggling to see what Tesla's unique selling point is, to be frank," said MacKenzie.

But Tesla owns an undeniable "cool" factor that its competitors would love to have. The ultra-slick Roadster has a range of about 244 miles per charge, according to the company -- the first production electric vehicle to get more than 200 miles on a single charge. And it does zero to 60 miles per hour in just 3.9 seconds -- better than most similarly priced sports cars.

With the Model S, Tesla hopes that it can match "cool" with affordability and practicality and make its new investors happy.

http://money.cnn.com/2010/06/29/tech...n_bin&hpt=Sbin

[shmike]

IPO = It's Probably Overpriced

[shmike]

Ahem...

Originally Posted by shmike

IPO = It's Probably Overpriced

[Homeslice]

Pretty much hipster value only. But who knows, that might be enough to punch it up a bit.

[OneSickPsycho]

Originally Posted by Homeslice

Pretty much hipster value only. But who knows, that might be enough to punch it up a bit.

but won't hipsters be against the whole publically traded company thing?

[goof2]

Originally Posted by OneSickPsycho

but won't hipsters be against the whole publically traded company thing?

I have noticed a certain fluidity in the ethos of the typical hipster.

[goof2]

May as well throw money in the ocean.

[Smittie61984]

Originally Posted by goof2

May as well throw money in the ocean.

Preferably the Gulf to soak up some oil.

[pauldun170]

Originally Posted by goof2

May as well throw money in the ocean.

Originally Posted by Smittie61984

Preferably the Gulf to soak up some oil.

[Homeslice]

http://www.fool.com/investing/high-g...uh-oh-ipo.aspx

Rick Aristotle Munarriz
July 7, 2010


It sure didn't take long for Tesla Motors (Nasdaq: TSLA) to shift into reverse.

The electric-car maker that dazzled the market with its IPO last week is now officially a busted IPO after closing below its initial price yesterday. It headed even lower this morning.

There certainly was plenty of buzz behind the Wall Street debut of the company behind stylish but pricy zero-emission cars. Tesla bumped up the number of shares it was offering and priced its freshly minted shares at $17 apiece, comfortably ahead of the original $14 to $16 range.

The mania was just getting started. The stock closed 40% higher on its first trading day, briefly breaking through $30 at one point the following day. It was a gravity-defying feat for Tesla, since the market was tanking at the time.

Shares have been rolling downhill ever since.

Sadly, Tesla isn't the only IPO to come blazing out of the gate like a rodeo bull, only to be mauled by the bear.

Hot starts cool off quickly
The IPO pipeline isn't exactly gushing these days, especially after the market rally that began in March of last year came to a screeching springtime halt.

Many companies have had to postpone their debutante balls or send underwriters packing for keeps. The limited supply of fresh meat has helped spark interest in some of the new names, but it's been hard for the one-day wonders to live up to their rocking initial impressions.

Let's go over five of this year's IPOs with the healthiest opening-day gains. See if you can spot the gruesomely obvious trend.

Company
IPO
1st Day Close
7/6/10

Financial Engines (Nasdaq: FNGN)
$12.00
$17.25
$12.56

MaxLinear (NYSE: MXL)
$14.00
$18.70
$13.26

Meru Networks
$15.00
$19.17
$11.02

Calix (NYSE: CALX)
$13.00
$15.10
$10.87

ReachLocal (Nasdaq: RLOC)
$13.00
$14.98
$12.27


Source: Hoover's IPO Central, Yahoo! Finance.

Shares of retirement planning specialist Financial Engines lead the pack with their 44% surge on its first trading day. They have gone on to give back nearly all of those gains.

It gets even uglier after that. The other four stocks -- recipients of opening-day gains between 15% and 34% -- have gone on to give all of those upticks back.

And then some.

They join Tesla Motors as "busted" IPOs, a name given to new stock offerings that break below what their first public investors paid for them.

Fixing the broken
No one is happy when IPOs go underwater. Underwriters look greedy. Their choice clients that seemed so grateful to get in on the offerings grow ungrateful.

However, if we're talking about quality companies with fundamentals intact, busted debutantes can turn into lucrative investing opportunities.

Webhosting giant Rackspace (NYSE: RAX) went public two summers ago. It had to settle for a $12.50 price after its initial pricing range had the shares fetching as much as $16 apiece. Even the $12.50 starting line proved to be overly optimistic. Rackspace opened at $10 and went on to meander in the single digits for months. It bottomed out at a mere $4 last February. It now trades comfortably in the high teens.

I dissed Tesla Motors last week, just as its stock was peaking. I felt the mania was overdone for an unproven company that is likely still years away from profitability. I wasn't alone.

However, I also took advantage of this morning's bust to put in an outperform rating on the stock in the Motley Fool CAPS rating service. I still think it's a lottery ticket, but now that it's trading for roughly half of last week's peak, it's a considerably cheaper lottery ticket.

The challenges are real for Tesla. It will need to be successful with its more accessibly priced sedan in two years. It will also have to stand out from a market that is quickly ramping up the production of fuel-efficient hybrids and electric cars.

However, there is some degree of comfort in buying into a story stock where the potential long-term promise is still largely intact. Paying less than what a chagrined underwriter's best accounts had to fork over is just a showroom steal.