Tesla Motors Sets IPO For Week Of June 28(online.wsj.com)
online.wsj.com
Tesla Motors Sets IPO For Week Of June 28
http://online.wsj.com/article/BT-CO-20100615-709209.html?mod=WSJ_latestheadlines
11 comments
Auto companies are hugely capital intensive (which is why you don't see many new ones) so I don't see what's insane about it. They are going public to raise funds to hopefully one day make loads of cash. It's a different kind of IPO than something like Google which was simply to make the employees wealthy, but not insane.
tl;dr this is an IPO at its finest--a make it or break it company trying to raise funds on the open market.
tl;dr this is an IPO at its finest--a make it or break it company trying to raise funds on the open market.
What Tesla offers is more than the cars they sell. They have put battery technology into practice in a way few other car companies have done. This is going to be worth money in the future. Toyota and Tesla announced a collaboration in May 2010.
http://www.teslamotors.com/media/press_room.php?id=2509
I think Tesla may well play an important role in the future where they teach other car companies how to "do" battery cars, and I can see that if they do this well they may be hot property.
I think Tesla may well play an important role in the future where they teach other car companies how to "do" battery cars, and I can see that if they do this well they may be hot property.
I don't see the insane part. Making cars is very capital intensive and it's virtually impossible to ship a high-volume car without large amounts of capital. I think that Tesla's demo of a small volume roadster with private money sets the stage for a larger future offering.
But it's not "high-volume" - it's sold less than 2,000 units! And they can't even get the price under $100k even with all of the subsidies!
I said:
Roadster: small-volume: 1063 sold using VC money: good demo
Model S: high-volume: needs public money
Roadster: small-volume: 1063 sold using VC money: good demo
Model S: high-volume: needs public money
maybe oil companies should invest in Tesla. they have billions to spare, it would give them green cred, and act as a hedge for the case where demand shifts from gas to electric powered vehicles.
I don't think demand is going to shift to electric until it becomes more economical than combustion. Path of least resistance still rules the economy. Telsa's current state of affairs indicates that electric has a long way to go before it can viably compete in the mass market.
or as a way to make sure the demand does not shift
How does one take part in an IPO? Can I use my E-Trade brokerage account?
I'm just getting into investing, I know its risky times and a risky company, but I think battery tech is the future and Tesla obviously knows a few things here.
I'm just getting into investing, I know its risky times and a risky company, but I think battery tech is the future and Tesla obviously knows a few things here.
I would be surprised if you can get a part of it. Most IPOs, particularly if they are tipped to be 'hot' are locked up by institutional investors and brokers' preferred clients. The supply is restricted to ensure that the price moves higher on the first day, giving both a successful launch and a handy profit for those involved.
It's almost a case where you don't want to buy into an IPO that you can get into.
Having said that, if you can get an allocation through e-trade, by all means go ahead. On the plus side you don't have to pay brokerage fees to enter.
It's almost a case where you don't want to buy into an IPO that you can get into.
Having said that, if you can get an allocation through e-trade, by all means go ahead. On the plus side you don't have to pay brokerage fees to enter.
If you're interested in participating in an IPO and you have ETrade, I would use this page as a jump off: https://us.etrade.com/e/t/estation/pricing?id=1301050000
Contact your brokerage firm and ask what the qualifications are.
For the full article, click the first link here:
http://www.google.com/search?q=wsj+tesla+178+Million
http://www.google.com/search?q=wsj+tesla+178+Million
Do you guys think it's a good idea to buy TSLA on day one?
I would say no. The strongest analogy between Tesla and a recent IPO I see is Clearwire - similar circumstances, large capital intensive business with some hype behind the technology but no real revenues to back it up.
Getting into an IPO on day one is usually not a good idea unless the company has reliable revenue and there is a reason to expect 20-30+% growth near term (Google, First Solar,etc). Many ipos will look like Clearwire (and for example, American Apparel, Isilon, and to some extent Rackspace etc.), a IPO price which stays steady then a significant drop.
Tesla won't have a reliable revenue increase until 2012 as far as I can tell, which is a long time of stagnation which the market will not take kindly too, IMO.
Getting into an IPO on day one is usually not a good idea unless the company has reliable revenue and there is a reason to expect 20-30+% growth near term (Google, First Solar,etc). Many ipos will look like Clearwire (and for example, American Apparel, Isilon, and to some extent Rackspace etc.), a IPO price which stays steady then a significant drop.
Tesla won't have a reliable revenue increase until 2012 as far as I can tell, which is a long time of stagnation which the market will not take kindly too, IMO.
I'm not familiar with Clearwire, but perhaps another useful analogy would be the stock of Vonage, which IPO'd in 2007 at $13ish I believe. Vonage wasn't profitable up until last year and their stock is at $2.47 as of today's close.
Yes, as long as whatever amount invested isn't going to cause sleepless nights and you're willing to wait 5-10 years before you sell it.
I wonder if a liquidation event like this is going to make it hard to keep key employees around. The company is hardly at a place where it can afford to lose people and "hold the line".
I really hope these guys succeed, I know the founder has been having money troubles and it has made me worry about Tesla's future. This is an industry that can use a jolt of innovation.
According to the article, Musk owns at least 28.8% of Tesla, which is about to go public. He's not having money troubles; he's having divorce troubles. Surely his claims of the former are to help him with the latter.
Tesla's main competition right now is Nissan with the LEAF. They need to scale up and drive down the price of the Model S and 3rd model rapidly, or they'll get buried by the big players.
What they've done is great from a technological standpoint, but they need economies of scale to keep going.
What they've done is great from a technological standpoint, but they need economies of scale to keep going.
You think a $50,000 luxury sedan with a 200-mile range, more interior room than an SUV, and a < 6s 0-60 time competes with a $25,000 econobox with a 100-mile range and a top speed of < 90mph?
I said the companies are competing, not those specific models.
Nissan's future plans no doubt include putting its electric drivetrains in cars like the Infinity G37/Altima Coupe, its mid-size Sedans, Murano crossover, etc, and they'll have a lot more production capacity (ergo economies of scale) and bigger R&D budgets than Tesla, so they'll definitely end up competing against each other. Nissan also has the benefit of being an established company with a good reputation; it will take a bigger leap of faith for the mainstream public to buy a Tesla, even if their 3rd model costs 30k.
Tesla started at the top of the market and Nissan near the bottom, but they'll no doubt meet in the middle and compete for the most lucrative segments.
Nissan's future plans no doubt include putting its electric drivetrains in cars like the Infinity G37/Altima Coupe, its mid-size Sedans, Murano crossover, etc, and they'll have a lot more production capacity (ergo economies of scale) and bigger R&D budgets than Tesla, so they'll definitely end up competing against each other. Nissan also has the benefit of being an established company with a good reputation; it will take a bigger leap of faith for the mainstream public to buy a Tesla, even if their 3rd model costs 30k.
Tesla started at the top of the market and Nissan near the bottom, but they'll no doubt meet in the middle and compete for the most lucrative segments.
I'm waiting for the (also Musk-led) SpaceX IPO. I hope there is one soon.
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interesting that Tesla suddenly announces IPO a few days after the big news splash about the big lithium deposit find in Afghanistan. I'd expect a big lithium find to push down battery prices in the future and a Tesla car is battery intensive. Even if Tesla ends up not using lithium not every investor will know that.
The announcement was not "sudden", but the date has been in discussion publicly for over 6 months. In fact Toyota agreed to invest 50M in Tesla only if it IPOed before the end of the year.
Their innovation may be remarkable, but the fact is that they make a product which isn't economically feasible without a lot of help from taxpayers doesn't bode well for the long-term health of the company.