Tesla IPO to Test Auto-, Financial-Sector Resolve
By Bill Visnic June 28, 2010Privately held companies' initial public offerings, or IPOs, were the Valhalla of the investment and "dot-com" sectors a decade ago. And despite the comparative financial bust the dot-com frenzy turned out to be, IPOs haven't totally lost the glamor they gained during that time.
Now it's the auto-sector's turn, with the heavily-hyped IPO of California's darling electric-vehicle company, Tesla Motors, ready to go IPO tomorrow. With IPO activity - and success - dropping precipitously during the recession, the Tesla offering will prove an interesting barometer of the appetite for IPOs in general and in particular how the merging of the auto, financial and "green" sectors affects the equation.
The reception for the Tesla IPO also may be an indicator for how well the hunkered-down investment community views this year's really big nut on the IPO tree: General Motors Co.'s return to the publicly-held domain, coming perhaps sometime before the end of this year.
Tesla said on Monday it was enhancing its share pool by 20 percent to around $200 million, including, including some shares from the private portfolio of CEO Elon Musk.
Earlier this month, Tesla hiked its estimate for the IPO offering to $180 million from the $100 million the company originally projected in January - this after Toyota Motor Corp. said it was making its own $50-million investment in Tesla and made a deal to sell the EV maker the former Toyota-GM New United Motor Manufacturing Inc. joint-venture assembly plant in Freemont, CA. Tesla plans to use the NUMMI plant to accommodate production of its Model S sedan starting in 2012.
In its update today about the Tesla IPO, Edmunds.com's Green Car Advisor points out that, like many of the dot-com companies that rocketed the acronym IPO to rock-star status, Tesla has never generated a profit and lost more than $25 million in the first quarter this year, as well.
Tesla Model S image courtesy Tesla Motors
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