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The IPO of Electric Car Maker Tesla on June 29th will Attracts Global Investors Eyes

published: 2010-07-01 17:27

The Californian all-electric car maker Tesla Motors Inc. will register with the Securities and Exchange Commission for the initial public offering(IPO)on June 29th, which will be the biggest and possibly the first public offering for a U.S. car company since Ford Motor’s IPO more than 50 years ago. Whether Tesla can make a great coup depends on the investor’s confidence on the prospect of electric cars.

According to the SEC documents presented by Tesla, Tesla will raise as much as $226million by pricing 133million shares on$17. Tesla plans to invest the raised fund on factory, or proceed with the necessary acquisitions. The company’s shares will be listed on the Nasdaq from June 29th, with the code TSLA

Among the offering shares, 11,880,600 shares are offered by the company and 1,419,400 shares from selling stockholders. In addition, the selling stockholders have granted the underwriters a 30-day option to purchase up to an additional aggregate of 1,995,000 shares of common stock to cover over-allotments. The above quoted market priceis higher than the range of $14 to $16 a share, earlier indicated by WSJ.

Tesla all-electric sports car not only attracts the green investors, but also appeals to car enthusiasts. However, the fashionable Roadster charges up to 109, 000 USD, with just only 1,100 of its all-electric sports cars on the road by the end of March,

In order to raise the sales volume, Tesla plans to launch parity cars in 2012. Although Tesla hasn’t paid one penny on advertising, the publicity stunt about the perfect combination between fashion and green energy makes the Advertising Times list Tesla on the 50 hottest brands of US in last November. 

"This is the first time in my lifetime I'm watching an American car company be formed instead of disappearing," said Ben Holmes, president of IPO research firm Morningnotes.com. "It's a first mover in a brand-new industry."

Analyst said, the Tesla IPO could be regarded as the investor’s confidence index on the prospect of the green power technology and the electric car industry.

According to the prospectus of Tesla, the companylost $25.5 million in the first quarter of 2010, higher than the quarterly loss of $16 million a year earlier. For all of 2009, it lost $55.7 million, less than the $82.8 million loss in 2008. The company has sold only 1,000 Roadster since 2008, and Tesla is planning on introducing its Model S sedan in 2012.

Tesla introduced its first car, the Roadster, in 2008, then a second version last year. 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. Besides, Tesla believes that they will turn into profit after the launch of Model S in the market.

Tesla has successfully launched the remarkable product, which is still in niche market, but it may take 10 years or above to establish the emerging electric-car technology.

However, the big carmakers are still optimistic about the outlook of Tesla. Toyota has agreed to invest 50 million USD under IPO price. Blackstar Investco, owned by Daimler, bought out 9.6% stock right before IPO.

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