Tesla IPO Update #1: A Glimpse at EV Maker's Finances, Market for Tech Stocks
By John O'Dell January 29, 2010
In its filing this afternoon for an initial public offering, California-based Tesla Motors revealed a bit more about its finances that it has had to in the past.
Tesla needs funding to help pay for development and production of its 2012 Model S electric car.
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Tesla Motors said in its filing that it is required under the terms of a just-approved $465 million federal loan to set aside half the proceeds of any public offering - up to a total of $100 million - in a dedicated account to be used to pre-pay certain costs of the new powertrain and vehicle manufacturing facilities being funded by the loan, and to cover any cost overruns on the projects.
Tesla also said it will use $33 million of its anticipated 2010 capital expenditures budget of $100- to $125-million to pay for parts of the powertrain and Model S production facility costs that are not covered by the federal loan.
The Tesla Roadster (right) is a favorite toy of many Silicon Valley millionaires and corporate chieftains with a love for speed and a desire to be seen as either green or, at least, cutting edge. But the company is launching its public offering in a year in which most economists expect to see continued high unemployment and little economic growth.
Whether it can parlay its high visibility among monied investors into the sale of $100 million or more worth of its stock remains to be seen
Although nine high-tech companies went public last year, that's down from an average of 38 a year from 2003 through 2007.
John O'Dell, Senior Editor
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