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What a week it’s been! Tesla’s stock price is currently sitting just over $16, down from last week’s IPO price of $17. In the meantime, it’s been as high as $29.89 per share. Plenty of analysts figured Tesla’s IPO would be bubble-tastic, but did anyone think the fizz would go out of the EV maker’s stock so soon?
18 Comments on “After One Week On Nasdaq, Tesla Stock Falls Below IPO Price...”
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How’s this going to look on Toyota’s balance sheet? Or, were they already able to dump their stock (like most big traders) at the artificially inflated prices we saw when the IPO was made?
Did anybody NOT see this coming?
Fundamentals, man, fundamentals.
This drop can’t last. Tesla is too small to fail.
Tesla is a high-risk cleantech stock, and the valuation of these start-ups are precarious. I would say these fluctuations are exactly what has been expected, and may be following the trajectory of another recent EV related IPO; A123. Early pop and a steady decline.
http://www.marketwatch.com/investing/stock/AONE
However, while TTAC’s attitude towards Tesla is well-established, judging the relative failure of Tesla on a drop from its IPO is as premature as judging Tesla to be a success because it almost hit $30 at its opening day.
Day-to-day, or week-to-week, fluctuations of cleantech stock like Tesla’s is expected. It’ll be a very news-sensitive stock for the foreseeable future. The value of its stock is representative of its risk, if successful the stock will skyrocket, and if not will plummet. This is something the market knows is a gamble. These fluctuations are only relevant to day-traders, because we’ll see a lot more.
But more importantly, Tesla as a company already got $226M from its IPO (more then they originally anticipated), and the percentage of the company that is currently public isn’t enough to heavily influence the operations of the company even if it falls further. What really matters is if they can show substantive results.
TSLA parallels A123 Systems (AONE) fly-and-die IPO of last year. AONE can not create investor confidence making EV batteries and TSLA can’t do it making cars. Hold on to your shorts.
Twotone
The only person I can think of who would buy Tesla shares is someone who thinks Tesla will be acquired at a premium. Anyone who looks at their prospectus will see that this company is as much fluff as the worst company in the dot com bubble.
Even their revenues are ridiculous. Let alone profits. Profits? Years away. I’m surprised NASDAQ even lists a company like this. What happened to standards?
I’m surprised it took so long.
Hopefully Elon and other insiders cashed in their chips by now. The suckers who bought the shares from them can now go looking for the proverbial greater fool.
Here’s a company with one product costing over 100 large, but only then after a tax payer subsidy; sales are already termed disappointing (what did anyone expect, for crying out loud?). Did anyone notice that the economy is heading further south each day? Are these people high, or just stupid? At least Delorean could blame it on cocaine. At this stage of the game, it’s a wonder someone associated with this entire situation isn’t in jail. Investing in sub-prime mortgage backed derivatives makes about as much sense.
You know, I’m fairly skeptical about Tesla, but the responses here are a bit over the top – armchair quarterbacking at its best…
Not really.
Take a look at the Balance Sheet and Profit and Loss Statememt. These are not the numbers of a going concern. One of many, the R&D spending is one if not two decimal places away from where it needs to be if they are honestly planning on birthing a new model.
The IPO needed to raise about three times what it did to put this company on any kind of a foundation other than the quicksand they are on now.
Time will tell if this IPO was nothing more than to fill the pockets of the insiders as they head for the exit. The concensus seems to be that is all it was.
I agree, the level of “pundit pessimism” here is mind boggling. Everything in this world that you can get high praise for also happens to be difficult. And the common theme of things that are difficult is that there are going to be lots of people criticizing the efforts because they have brilliant ideas of how they could execute better. Unfortunately, these sophists are also unwilling to commit to doing the difficult task. And the ultimate shame is that there are many people who want to witness failure because they seek to validate their pessimism.
Anyway, regarding the consumer level vehicle business model (assuming they try that with the S), they have 3 things going for them that seem to give them a slight edge that give them a slight edge up.
1) They seem to have avoided the whole dealer network SNAFU. Profit margins should be boosted by allowing the automaker direct control over how the dealers operates. Granted the individual stores still need to turn a profit, but there should be savings with floorplanning expense, knowledge sharing of what is working/not working (think A-B testing across markets), and direct responsibility over the customer experience.
2) Some suppliers seem to be eating some of the capex and R&D costs that traditional automakers normally would carry. It’s probably a combination of government breaks on “green” suppliers or maybe the suppliers want in on an emerging market/tech. But the normal $1.5B or so capex budget for volume automaking doesn’t seem to affect Tesla as it does GMFordToyHondNisCo.
3) They are getting some guidance / help from some established automakers. Of course, I doubt Toyota is spilling the beans of their total knowledge pool. But Tesla should benefit from volume manufacturing ideas from Toyota, and any electrical knowledge from Daimler that could be invaluable (that JV Hybrid tech center in Troy Michigan has to be good for something).
Tesla has a huge challenge to overcome, and it’s super easy to lack confidence in them. But at least there are some positives that they could turn into a roaring success. Part of me wants to seem them succeed in spite of the nay sayers.
It’s easy to armchair QB this whole thing. But it’s really tough to be in the trenches working in the auto biz. There are lots of people putting their careers and livelihood on the success of Tesla – let’s let’s at least be fascinated by what they’re trying to do instead of poo poo it all the time.
BTW I bought their stock on the IPO public opening, and dumped it all the next morning. It’s not that I don’t believe in them, I just felt it was fair value at $17. Maybe I’ll buy some back later if it keeps dropping.
Why yes, some of us did think the fizz would go out of TSLA the moment short-selling was allowed… last Friday, to be precise.
Dot com bubble redux.
Pundit pessimism?
I’m actually impressed that Tesla managed to bob above the vaporware level long enough to actually produce a car. (though Venturi did it first…) But the car and the company itself were never a solid business case.
For all those who critique the “pundit pessimism,” since these folks are obviously up for a sure winner and know a good thing when they see it, I suggest each pick up several hundred shares, or so. As much as you can afford. Then, pretty soon, come back and laugh at those of us luddites after the stock has quadrupled in value, and you’re driving around town (just don’t go over 240 miles) in your nice new Telsa roadster. Good grief.
The Holydonut gives us a handful of reasons to be optimistic, and then closes with: “BTW I bought their stock on the IPO public opening, and dumped it all the next morning.”
THAT says it all. Talk about mind-boggling.
Their shares are reasonable around $15 (which is where I thought their IPO was going to open originally). I have some limit orders in place to pick them back up when they become reasonable once again. But I’d be stupid to continue holding a stock that was overvalued.
I think you guys are picking extremes of either “Tesla Death Watch / not a hope in hell” and “put all my eggs in one basket.” Hopefully you can fathom there is a middle ground. It’s not like there always has to be a situation where you’re proven right or proven wrong.