Jun 30, 2010
Tesla IPO Risky Yet Profitable For Long Term
Written under: Business, Finance
Electric-car maker Tesla Motors Inc. will be on the IPO market this Tuesday under the Nasdaq Stock Market symbol TSLA. They are hoping to raise around $178 million by selling 11.1 million shares at $14-$16 each.
The Palo Alto California startup is a auto industry niche company – specializing on electric cars with a price tag of more than $100,000.
Electric cars is an emerging technology and analysts say that it could take several more years for it to become mainstream. Thus, good profits from the TSLA stock may come in around a decade or so.
Tesla introduced its first car, the Roadster, in 2008, then a second version in 2009. It plans to introduce a Model S sedan in 2012, with the goal of producing about 20,000 cars a year with a price tag of $57,400.
Longer term, Tesla is looking to make the Model S a template for mass-produced electric cars, including a line at an even lower price point.
It has signed a private-placement agreement for Toyota to buy $50 million of its shares at the IPO price, another vote of confidence for Tesla; Daimler AG, through its affiliate Blackstar Investco LLC, has a stake of 9.6% prior to the offering.