Dare to dream: Tesla IPO

We’re clearly not experts on the subject, so we’ll tell you what more qualified people have to say… According to Josef Schuster, the Chicago-based founder of IPOX Capital Management LLC, “The company is a great concept with relatively weak fundamentals. Markets are weak and in a weak market right now this is hurting the company even more.”



Everybody called this, so I’m in no way surprised. The Tesla IPO was hot, and if you got in on it and got out by day 2 you would have made a killing, but once the honeymoon was over and the stock price started diving everyone jumped off. The company flat out admitted they won’t be turning a profit for years, and while their vaporware smells the best, until they start making real sales theres no guarantee they’ll be sucessful - even if they do wind up coming out with a fantastic product in the Model S.

From an investment perspective I would think to wait a few months and see where the stock is at, my thoughts are it will probably continue to drive lower and then possibly buy in once the Model S starts to look like more of a reality - at that point I’m guessing the stock will be under $10 a share. The market is probably going to keep dumping off for a few months and most investors want companies with known financials to try and mitigate those risks.

It doesn’t help that the market has also been in freefall for the last week or so. Given what they’re saying, their honesty may come back to bite them…

The downside is that, from what I understand, they were counting on their stock to fund production of the sedan. With the stock quickly falling flat, so too, might the whole company.

Tesla may not be done yet. Check this out. You have to scroll down to their blurb about A123 Systems. It’s a lithium battery company that went public last year & ended up in similar boat.

Apparently there’s a recent pattern to IPO’s that is independent of fundamentals and Tesla is probably following it

It’s too bad we can’t bail out Tesla instead of GM. I want a f@cking electric car already! It’s 2010 and my flying car is nowhere to be found. The least you could do is sell me an electric roadster. :unamused:

It looks like the IPO is just the first step so that they could buy their part of the NUMMI plant, but it appears they are only buying a facility with no equipment for production. Toyota’s investment ($50M) in the company was also based on the IPO happening, so maybe they’ll use that money to buy some of the production equipment. It’ll be a while before any cars start rolling off the production line I think, but unless they make real progress toward this goal, investors will jump.

Consequently, I drove by the Tesla dealership near Stanford just this past Monday. The parking lot was pretty much empty, but if I had known about the IPO, I would have stopped and snooped around a bit.

cdaisy: Tesla was bailed out…in the form of $465 million from the Department of Energy to work on fuel efficient cars. It was a big boost for them, as they’ve been cash strapped since nearly day 1.

I forgot about that. Bummer. I hope they can pull it together. I drive 16 miles each way every day through city traffic, so an electric car would be perfect for me. Especially a fast one!

Not how it works. They already got the money from the IPO (~$225 million). The stock price could go to $0.01 tomorrow, and it wouldn’t affect Tesla’s balance sheet in the slightest. The “stock price” is the price it’s being traded at from one private shareholder to another. The publicly traded shares only amount to <15% of the total outstanding shares, so they couldn’t even mount a shareholder revolt and vote out the board. Nor can anyone do a hostile takeover. A really low share price would, however, limit their ability to raise money by issuing more stock, but I can’t imagine that’s in the plan medium term.

They’ve got over $600 million total to bring the Model S to market. That ought to be plenty, if they do it right.

I still wouldn’t buy the stock though.

Bump to post video of the Model S driving around:

I remember being really skeptical that they could engineer a complete vehicle from the ground up when they announced the initial Model S plans. Obviously they still have to get it into production and sell it at a profit, but I am hugely impressed with what they have accomplished so far. This will be the best looking sedan on the road, and the chassis engineering videos they posted at the Detroit show looked really solid too. They have poached a bunch of Lotus Engineering people, and they are good. They may actually pull this off.

If they can manage enough range for me to easily do the day trip up to Copper Mountain that I did today (80 miles each way, but through big mountains in 20 degree cold), and the price doesn’t creep way up, I think I’m in for one of these.

nice vid. But no new developement visable asside the light cluster. Will it have an interior soon?
Go Tesla, go !


I still have doubts. Either Tesla or Fisker are going to be caught in a money laundering/cocaine bust soon. I just feel it.

The problem is that Tesla is making cars that few people want. Sure they look good, but not that many people want electric cars. People enamored with electric cars that think somehow it’s better for the environment, but it only is if the local power supply is cleaner than car emissions. Americans bought fewer hybrids last year than in 2009, because the benefits outweigh the drawbacks.

Tesla is trying to push. It’s hard to push people towards your product. The best way is to pull them to your product, and the technology is still a significant barrier, let alone trying to start a brand new company in one of the most capital-intensive industries possible. They have guts, I’ll give them that.

Cameron: It is important to note that oil is back up over $90 a barrel. From what I’ve read, people expect it to be over $100 this summer. That’s the highest since August 2008. I think the market is going to come back to hybrids and electrics.

It might, Mr 914. I think part of the rising cost of oil is the rash decision to ban new offshore drilling for a few years, along with probably some OPEC manipulation/collusion. I just don’t think hybrids have enough of an efficiency improvement for most people to buy them, and electrics are just redistributing the load to power grids that use a variety of fossil fuels.

I don’t think it’ll happen, but I’m hoping for hydrogen fuel cells to somehow defy entropy. =)

From what I’ve read, people expect it to be over $100 this summer.

$3.41/gallon for “regular” here this morning. “Premium”, $3.63/gallon…

We’re not the one’s driving the boat here:

Investors are also concerned about a slowdown in China’s economy. The country’s oil demand rose above 10 million barrels a day for the first time in November, but the Chinese government’s actions to slow its rapid growth could dent demand for crude from the world’s largest consumer of energy. China is set to release December inflation data Thursday.

From today’s story: http://online.wsj.com/article/BT-CO-20110119-709894.html

This always comes up. Electric power is more efficient and cleaner, even if your local power plant is burning coal. The total thermal efficiency is higher, and it is a lot easier to clean pollutants at a single stationary source than it is at 200 million movable, often poorly maintained sources. This is ignoring all the other externalities, which are almost all worse in the case of oil (increasing difficulty in finding it, price instability, the high risk of spills, shipping it halfway around the world, the fact that most of it is owned by people who don’t particularly like us, the hydrocarbon emissions from evaporation at millions of gas pumps, groundwater contamination, the lazy bastards dumping used oil down the drain, etc.).

IC engines will continue to have a place for a long time, but this is the future. As for “pushing” the market: if you asked most people in 1905 whether they’d rather have a car or keep their horse, I’m guessing the horse would have won by 90%. We all know how that turned out.

OT, but hydrogen is a pipe dream. It’s nothing more than a complicated, expensive, and dangerous battery. In addition to all its other considerable problems, its widespread use would require an enormously expensive infrastructure that will never get built.

Scott brings up some important points.

70% of electricity comes from sources that create CO2. Notably, natural gas is much cleaner. That means 30% of electric cars are already contributing near zero CO2. Much cleaner than gas powered cars.

NURB: we are not driving. In Texas, they have a saying, “the spigot is here, but the handle is in Saudi Arabia.”