Tuesday IPO For Tesla May Set the Tone For Future Upstarts

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.

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.

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upwards - 6/28/2010 5:22:16 PM

0 Boost

Not for me.

Larrybel2000 - 6/28/2010 5:31:01 PM

+2 Boost

I wish Tesla luck. It's a tough sale. This might be worth spending a little money on to see what happens. Don't invest more than you can afford to lose.

Larry B.
Key West.

vvelez - 6/28/2010 5:58:32 PM

+2 Boost

never know this could be the stock of the decade and those who invest either make big gains or lose everything. Oooooo I like this, Capitalism at its finest

thstone - 6/28/2010 6:00:08 PM

+1 Boost

Tesla is the biggest ripoff since Enron and Elon Musk makes Jeff Skilling look like a choir boy.

There is no way that Tesla will EVER make an operating profit. They have sold 1,800 roadsters at $120K each for a total of about $220M revenue and lost money on every car sold. The Model-S will be no different.

The only reason that Tesla hasn't gone bankrupt yet is their grant of $450M from Obama and now $50M investment from Toyota. This will cover their costs for 2010 and 2011.

However, there is no way that the Model-S will be on sale before 2012 so they need more money to cover 2011-2012, and thus, the need for the IPO. What about 2013? They go broke, of course.

The only exit strategy is to sell the company (or all of the IP) to a big auto company between now and 2013.

The question is whether a company who whose sole expertise is how to charge lots of lithium ion batteries is worth $1.5B+?

Joe_Limon - 6/28/2010 10:41:35 PM

+1 Boost

If you can get ahold of this stock the moment it hits the market floor and I'd say buy, then you would have to sell within the next day or two. Tesla's greatest feat so far is as a hype generating machine. Long term investments in this company are sketchy at best.