Tesla IPO Raises $226 Million 274
An anonymous reader writes "Tesla, which will trade under TSLA on Nasdaq, has been priced at $17 per share, allowing the electric car start-up to raise more than $226 million in its IPO. Investors were expecting the share price target range to be between $14 and $16 but the overflow of excitement saw Tesla increase the number of shares it plans to offer to 13.3 million, nearly 20 percent more than originally planned." Reader hlovy contributes a link from Xconomy.com summarizing the skepticism among some analysts as to how much staying power TSLA will demonstrate.
Curious Guests at the IPO Celebration (Score:4, Funny)
Stock price already increased (Score:2)
Re:Stock price already increased (Score:4, Funny)
Clearly, many people don't remember pets.com
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Are you seriously comparing the quintessential .com bubble site to a profitable [cnet.com] and innovative car company? Just because their stock price is increasing on opening day doesn't mean that they're about to burst.
For instance, take - Google's stock [google.com]. There were a multitude of pundits and "experts" claiming that their $100 IPO price levels were totally unsustainable. They looked pretty stupid when the price doubled in 6 months. Sure, Tesla is no Google, but don't imagine that their stock price is guaranteed plum
Re:Stock price already increased (Score:4, Insightful)
No revenue stream now; no revenue stream until 2012.
This seems to be pretty much parallel to most of the business plans of dot-coms. "We have cool new technology! What, we also need sales?"
It really depends on how well they can market the roadsters... which they have not shown to be one of their strong suits yet. Time will tell. Opening day will not.
Re:Stock price already increased (Score:5, Informative)
Nope, they stopped making the Roadsters, all work now is on the S-Sedan and licensing their Drivetrain technology to Mercedes and Toyota.
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Oh..that blows.
Why would anyone want just another run of the mill "family car".
If it's got > 2 functional seats, I ain't interested. If they could have just gotten the Tesla roadster down to around Corvette prices....I think a LOT more of us would have them.
Re:Stock price already increased (Score:5, Funny)
Why would anyone want just another run of the mill "family car".
Obviously, there's a huge government conspiracy to make us think that people want "family cars". Heck, Wikipedia is claiming that a compact family sedan called the "Corolla" [wikipedia.org] is the best selling car of all time.
If it's got > 2 functional seats, I ain't interested.
Sucker - I'm not interested unless it only has one functional seat and zero doors.
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Why would anyone want just another run of the mill "family car".
Probably because they have a family and use a car for transportation?
Re:Stock price already increased (Score:4, Funny)
If it's got > 2 functional seats, I ain't interested.
Hard to set up a threesome if you only have one extra seat. I see what your priorities are.
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Electric vehicles are awesome, and I'm glad that Tesla continues to innovate and improve. Hopefully they can invest th
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If my neighbors will cough up $70,000 for a Land Rover or H2 then I don't see that price point as an issue, either. Especia
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No revenue stream now; no revenue stream until 2012.
I thought they were selling the current roadster through 2011 [wired.com].
What, we also need sales?
They are aware that they need sales. As I mentioned before, they have at one point turned a profit (though they aren't right now, as an anon pointed out). The co-founder of Tesla, Elon Musk [wikipedia.org] previously co-founded Paypal which was (is) quite profitable. I don't think that Musk needs to be schooled on how to make a business plan.
It really depends on how well they can market the roadsters
I would think it would depend on how well they can market their Model S since that will be their bread and butter starting
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I don't think that Musk needs to be schooled on how to make a business plan.
While his previous business was successful, it depended heavily on two key aspects: the revenue stream came from taking "off the top" of what amounts to providing a simple service, and it depended very heavily on one key player for the majority of its revenue: eBay.
This is different. His company will be required to produce a physical good with a warranty, which will have to meet expectations and requirements. When PayPal began, there were no real precedents to meet because it was a fledgling market
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That's a reversal (Score:3, Interesting)
I distinctly remember them saying a few years ago they didn't want to go public with the company so they'd retain complete control.
Maybe this is a good thing to grow the company, but will being beholden to the stockholders be a problem down the road?
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I thought they got a big loan from the government at obscenely low interest rate for a venture capital startup? (It was the program intended as a giveaway to the failing Big Three but dressed up as a program to increase fuel efficiency, and Tesla apparently called their bluff.)
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I thought they got a big loan from the government at obscenely low interest rate for a venture capital startup?
Tesla is perilously low on cash, and the government loan can't be used to fund operations. Although not quite this simple, it's basically only available for capital investments.
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I see what you did, there.
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I distinctly remember them saying a few years ago they didn't want to go public with the company so they'd retain complete control.
That was before the economy imploded and Musk has now run out of cash to float the company on his own. The only choice for survival was to either attract private investment or a public offering. I'm sure Musk feels the latter is the lesser of two evils for maintaining control into the future. Once he rebuilds his fortune he can buy back enough shares to call the shots again.
IPO: It's Probably Overpriced, but... (Score:5, Interesting)
What makes TSLA an interesting business proposition (although not, for me, at $20+) is that if (and it's a huge "if") they can get production up and running in a timely fashion, they really do stand to reform the auto industry.
The old model - manufacturers sell to dealers, and dealers sell to end users, but the dealers are franchisees who actually have no real relationship with the manufacturer. Your GM dealer sucks? Your GM dealer's mechanic sucks? It all reflects poorly on GM, and what's worse (from GM's point of view) is that all the short-term gains made by shady dealers and overpriced service departments go to the dealer, not to GM. Dealerships are profit centers for the dealer, but often breakeven or even loss centers for the manufacturer.
Tesla's model is new to the auto industry: manufacturer sells direct to consumer, and also owns the distribution network and the service departments. That's nothing new in high tech: Apple's made a fortune using that model. The "Apple Store" gives a retail presence, but the guy at the Apple Store doesn't really care whether you buy the thing on the spot or go back home and buy it through the website.
Applying that model to cars is interesting - and potentially groundbreaking. In the case of the Big Three, the dealer networks were an albatross around the neck of the auto manufacturers. If Tesla's model works, Telsa won't need a network of thousands of independent dealerships, because the only function of the dealerships will be to provide test drives and occasional servicing. Dealerships will be profit centers, not loss centers, for the manufacturer.
I'd say it's overpriced (Score:2)
Their cars come in at about the cost of a Ferrari. How is that *not* overpriced for a car that cannot go as far as a Ferrari?
How is that business model ever, possibly, going to work?
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The mass-produced Model S is expected to price in at BMW and Audi levels.
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Yeah, because that's why people buy Ferraris -- range.
The Roadster handily beats similarly priced Ferraris in acceleration. It's not the greatest sports car ever, but in terms of performance it's quite impressive.
I'm not going to buy one, but that's because I think a Mustang is too ostentatious for me. :P
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Umm...where exactly can you buy a new Ferrari for under $100K? And with tax/green rebates feds and state are giving...less than that....?
I know the avg distance between charges for the Tesla is ab out 250mi or so...but I think you will have to spend significant more $$$ on a Ferrari or any other super car to get it to beat a Tesla off the line, etc...
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It's not a major issue for 30% or so of consumers, and for a small car company, playing niches is just fine. For most consumers, the fact that it's a sports car with a sports car price-tag is a bigger issue than having to plug it in when they pull into their garage, especially since it takes less time to do that than it does to drive a mile out of their way to hit a gas pump.
Not that I blame them for doing sports cars first -- I mean, you need the torque for regen braking anyway, so why not recycle that for
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Yeah, helicopter footage of the highway out of Houston stuffed with cars fleeing Hurricane Rita that had run out of gas, while Priuses chugged along merrily on the shoulders, was great marketing for the Prius.
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As someone who just bought a used prius, I'd have to say that your insult is off base. At an AVERAGE of 48.5 mpg, this car doesn't suck. It is big enough for me an my wife, and enough space in the back to drag around groceries/skies/camping equipment/or mulch. As my drag racing days are behind me, what more do you/I need in a car?
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But (1) do those put out more pollution, and (2) use enough more gas to make up for the lower purchase price?
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It actually has more space for cargo than the Camry, in all respects, largely as much as most station wagons. Driving from Seattle to Boise, it has enough power to easily cruise up the huge hill at Pendleton Oregon at 75mph (I actually have to turn cruise control off, because my wife doesn't like the corners being taken at that speed).
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If Tesla's model works, Telsa won't need a network of thousands of independent dealerships, because the only function of the dealerships will be to provide test drives and occasional servicing. Dealerships will be profit centers, not loss centers, for the manufacturer.
So Tesla will not only have to fund cars, but also thousands of Tesla dealers around the world? I don't think that $200,000,000 is going to go very far in that case.
Re:IPO: It's Probably Overpriced, but... (Score:5, Insightful)
There's a lot of optimism priced into the stock right now. I wouldn't expect them to go out of business in the next couple of years or anything, and I might pick up a few shares if it gets down to $10-$12 or so, but a $22/share price sounds way too optimistic for my liking. I'd wait for the headline-buzz to fade a little before pouring too much money into it.
Telsa is not GOOG. Automobiles are a capital-intensive business.
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and the economy's not looking spectacularly hot right now
While that's true, the people who are at such a price point are largely unaffected by the current state of the economy. In fact, a large number of those people are likely seeing new profits at this time. Last I heard they are still back ordered by several thousand units.
While I too believe they are overvalued, I presume the price reflects what someone else already pointed out; they could be a game changer. This is likely further tempered by the fact they are pushing to enter a mid priced value point as well
Car dealerships are protected by state-level moats (Score:2)
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I'm not sure if you mean the "dealerships" by "local resellers", because I essentially bought my '99 car (that I got in about April '98, yes earlier than most cars change model year) online. It wasn't through a regular Mazda dealership.
Re:IPO: It's Probably Overpriced, but... (Score:5, Insightful)
Tesla's model is new to the auto industry: manufacturer sells direct to consumer, and also owns the distribution network and the service departments. That's nothing new in high tech: Apple's made a fortune using that model.
One difference is that Apple's exposure in a recall is limited to the replacement cost of a small household appliance.
It doesn't have to "service" anything.
Tesla has a $100K Roadster and a $65K Model S sedan in the works.
That implies a full-scale luxury dealer showroom and auto repair garage. Not a niche in the Galleria Mall.
Re:IPO: It's Probably Overpriced, but... (Score:5, Insightful)
Disclaimer: I own a Roadster, have a $5k down payment on a Model S, and bought a couple thousand shares of TSLA this morning.
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The Model S doesn't compete against a Yaris. It competes against the BMW 5 series and the Mercedes E class. You're not the target market.
If you can afford a new Merc, you can afford the gas to run it. If you can't afford the gas to run a half-decent ICE car then you can't afford $50k to buy an electric car.
So ultimatley the target market appears to be people with more money than sense; which obviously exists, but I doubt it's large enough to sustain a company like Tesla.
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Why do you assume that people who are buying these cars are ones that can't afford gas?
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Nothing. It's just fucking bullshit.
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So ultimatley the target market appears to be people with more money than sense; which obviously exists, but I doubt it's large enough to sustain a company like Tesla.
Right. Because if you've got tons of cash you're going to drive a Yaris because the TCO is low. Fark no. You're going to drive a nice ride. You can have sense, cash, and still want a high-end car. It's not an investment.
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Right. Because if you've got tons of cash you're going to drive a Yaris because the TCO is low. Fark no. You're going to drive a nice ride. You can have sense, cash, and still want a high-end car. It's not an investment.
Which part of "If you can afford a new Merc, you can afford the gas to run it" is hard to understand?
If you can afford a new Merc, why would you buy an unproven electric car from a company which probably won't be around in five years just to save a few bucks on gas? Even you seem to agree that there is no rational justification for worrying about fuel economy if you're the kind of person who'd pay $50k for a Merc, yet you're claiming I said the opposite.
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If you can afford a new Merc, why would you buy an unproven electric car from a company which probably won't be around in five years just to save a few bucks on gas?
Because you can afford to and don't mind taking the risk to have something that is on the cutting edge of technology. If I want proven, I'd buy a Toyota. I reserved a Model S because it'll be fast, combustionless, and around the same cost of a 5 series. Risky? Sure. But if I can afford the Model S, I can afford the risk.
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How about, besides saving "a few bucks on gas", you want to simply drive a more environmentally sound car, and are WILLING to be a first-adopter (paying a higher price) to help get rid of the companies like the one that has been ruining the Gulf of Mexico by spewing oil into it for 70+ freaking days with no signs of it stopping?
(I say this hypoc
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Because, when you go up to your rich friends and say 'check out my new BMW 5 series', they'll say, 'cool it's just like mine!'
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Some people with money care about the environment/politics enough to reduce gas consumption.
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You could describe people who buy Beemers and Mercs as having more money than sense for not buying a Yaris in the first place.
The appeal of the Model S to these folks isn't going to be cost savings on fuel. It's going to be the performance of a high-torque electric motor. It may not beat the other options on the straightaway, but it will beat them out of the gate which is what a lot of people care more about since you rarely get to exercise your max speed what with the po-lice around.
I'm not saying it's a
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The Tesla is not an economy car, it's a performance car.
Right. And because its an electric car, it brings "economy" along for the ride. Driving 250 miles on a couple bucks worth of electricity is hardly the typical "gas hog" which one typically associates with the performance class.
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I'm sure that will be a factor for people who already own one when the price of gas starts to shoot up. But I think it's more than "green" is coming along for the ride. Buy a nice luxury car with kick-ass acceleration and be able to make a (barely plausible but hey) claim to being "environmentally conscious"? Take that, Joneses!
Re:IPO: It's Probably Overpriced, but... (Score:5, Informative)
Re:IPO: It's Probably Overpriced, but... (Score:4, Interesting)
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Re:IPO: It's Probably Overpriced, but... (Score:5, Funny)
Guys, I can buy a base-model Chevy Aveo for $9,000 new, or I can buy a Ferrari F458 for $200,000. I don't understand how Ferrari can compete.
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They are in no way targeting the same market as the Yaris. They are currently selling the Tesla Roadster sports car, which has a base price of US$109,000.
The 50k Model S (which is not out yet) http://en.wikipedia.org/wiki/Tesla_Model_S [wikipedia.org] is targeting the BMW 5 Series market (528i = $44,550+ to 550i = $66,000+ MSRP) and when you run the numbers comparing them the Model S is vary cost effective.
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Assuming (Score:2)
Of course all of this hinges on if they can build a product that consumers want at a affordable price. Considering todays battery technology and the current prices of oil I am betting heavily against them.
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Considering [...] the current prices of oil
The current prices of oil are immaterial to their long term value. Sure, there are people who are going to invest heavily in the IPO and try to turn a profit in the extreme short term (investors generally buy in for the long term. So, the real question is whether the cost of oil will increase significantly over the medium term (the next few years).
Considering todays battery technology
I have the same problem with this statement - there are way too many companies with a vested interest in developing better battery technology for the industry to
Isn't that half... (Score:3, Interesting)
What the company got in the form of government loan from the stimulus package (seems like $544M was the number I remember of the top of my head). Also, isn't the CEO about broke?
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2) Yes, Elon is cash poor. All the cash is tied up in assets. This is not unusual.
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pessimism about EV cars or Tesla as a company? (Score:5, Interesting)
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Indeed, and Google is a classic case in point. It wasn't Altavista, Infoseek, Excite, or even GOTO (remember them, they invented bidded search ads), it was Google that came after and put together a very scalable and flexible architecture. They refined the standard IR algs, refined bidded ads, etc as well, but they weren't the first movers. Same goes for Ford, and I suspect Boeing (hello, Wright Brothers Airlines anyone?)
Its the person that gets the large scale infrastructure right that wins. What is the cor
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I like Google as much as the next geek, but I don't know if I'd call them a revolutionary technology company -- more a company that has done things that others had already done, better.
If anything that proves the GP poster's point -- as far as I know, people didn't make a lot of money investing in WebCrawler.
Good for them (Score:5, Funny)
I have to admit though I'm a little disappointed they didn't get the stock ticker COIL.
$226 million? (Score:2)
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They are buying a factory in California that is jointly owned by Toyota and Chevy.
Only One Thing I Dislike About Tesla Motors... (Score:3, Interesting)
Otherwise I think they have a fine product (although I cannot afford it) and I hope them well. Furthermore if the company name helps to make Nikola Tesla better known in this country, I think that would be great as I view Tesla as amongst the greatest scientists to ever work in the US.
Re:Only One Thing I Dislike About Tesla Motors... (Score:5, Informative)
Their cars run on DC motors (or at least get power from a DC source). Yet the company is named after a man who is acknowledged as the father of the alternating current (at least in the US).
Only the batteries are DC. The motor is AC and driven by an inverter in the car's Power Electronics Module. [howstuffworks.com]
Re:Only One Thing I Dislike About Tesla Motors... (Score:5, Funny)
Only the batteries are DC.
Well its been a while since I have seen any AC batteries, so I guess that's why they went with the DC ones.
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Their cars run on DC motors...
No, like most modern high-powered variable speed motors, they're synchronous polyphase AC motors driven by a variable frequency drive. One of the confusing issues in this area is that small motors of this type are referred to as "brushless DC" motors, while larger ones are called AC motors driven by variable speed AC drives.
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No, like most modern high-powered variable speed motors, they're synchronous polyphase AC motors driven by a variable frequency drive.
Close, but no: While synchronous motors are indeed most common in shipping vehicles today, Tesla, like AC Propulsion (from which Tesla licensed its technology) uses asynchronous AC motors.
One of the confusing issues in this area is that small motors of this type are referred to as "brushless DC" motors, while larger ones are called AC motors driven by variable speed AC drives.
The distinction is not one of size. Brushless DC motors are really synchronous AC in nature, with permanent magnets and zero field slip. These can be small (e.g. driving the fans in your computer) or large (the electric motor in a Prius). ACP and Tesla use asynchronous motors with field slip. These motors use no perma
Re:Only One Thing I Dislike About Tesla Motors... (Score:5, Interesting)
Only One Thing I Dislike About Tesla Motors... Their cars run on DC motors (or at least get power from a DC source). Yet the company is named after a man who is acknowledged as the father of the alternating current (at least in the US).
/methinks Tesla himself would be disappointed that "Tesla" Motor's cars require batteries, when his Black Magic Touring Car [evworld.com] ran on free energy delivered through a "dozen vacuum tubes -- 70-L-7 type -- and other electrical parts".
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He was also nuttier than a Snickers bar. He had several impressive inventions, but in his "normal" life, he did many strange things.
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Tesla had many accomplishments. While AC is an important one, so is radio communications, and the like. Some of his accomplishments are in the DC realm, at least due to having worked for Edison early in his career.
I don't know what to think (Score:2)
The last 10 years I've gone from knowing zilch about the financial industry to having a trust level of zilch. I've watched way too much fraud, IPOs of companies designed to dazzle investors and little else, and reckless greed that have combined to produce scores of great sounding ideas like this one. I simply have no way of telling whether this company stands a chance of creating a real product, or if they'll putter around burning through investor cash until everyone figures out It'll never work and it pr
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Their cars ARE REAL.
This isn't like vaporware.
They have a legit chance to change the auto industry. I would love to support them.
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By *real*, I mean viable. Are these cars ever going to be more than toys for the rich or will the technology filter down to the general consumer? This is what I can't figure out yet.
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Here is at least one indication...
They do already have a real product. The tesla roadster is being built and sold right now.
They also have a working prototype of their model S luxury sedan and need the capital to build their first mass production facility.
Its one thing to assemble a custom ordered high performance sports car by hand, but the semi-mass production required for a luxury sedan requires a factory.
Stumped. (Score:3, Funny)
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Seems investors were fully charged.
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Its pretty damn hard to get a venture capitalist to hand over a quarter billion dollar for anything less than your eternal soul plus interest.
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AFAIK, they don't (can't?) "make" you hold the IPO stock.. If you sell within 30 days, however, you are likely not going to be allocated IPO shares again, at least for a while. Yes, I'm nitpicking the difference, but I do think it's significant, esp. if one is willing to risk missing future IPOs.
(I got some at $18, since my brokers weren't in the IPO.)
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Yes i actually watched the "Booyah" (?) shouting guy on CNBC last week. He was going on about how this was expected to shoot through the roof in the initial IPO but as a company faced too many hurdles (competition, public interest, etc.) to justify holding on to the stock long term. He said get in early, then get out early. Also, apparently some brokers make you hold IPO stock for 30+ days. He said basically don't use them then.
And that's one to grow on. (The more you know?)
You mean Cramer?
The same guy Jon Stewart completely ripped apart 15 months ago for causing just about everyone who listened to him to lose their money during the financial melt down of 2008-2009? And at the end of the interview the point seemed to have been made to just do the opposite of what Cramer says if you actually want to make money. He's the interview: Part 1 [thedailyshow.com] Part 2 [thedailyshow.com] Part 3 [thedailyshow.com].
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Nice, I guess, if you don't mind driving something so fucking ugly that it hurts just to look at.
Re:Hippy alert! (Score:4, Funny)
Here's my ride. [shelbyautos.com] Look for it passing you on the highway.
Most people don't try to go out of their way to show off to the world that they have a tiny penis.
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Yes, I wish I could have a 3 inch cock and a junker car. Where do I sign up?!?!?!
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Not much of an IPO if all you got is 37 leet shares for sale.
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That is precisely the plan.
Right now they are custom building high performance sports cars at $100k+.
They are planning on building a factory to produce a luxury sedan in the $50k range.
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I don't forsee this company selling large numbers of cars, with a price tag over $100,000.
They stopped making the $100K Model R's, which they sold profitably.
This money is to start up making the Model S's, at an estimated price tag of $50K, which they will almost certainly again sell profitably.
Then they will make the Model T's, which in their road map is the electric car for middle class folk.
This is all about economies of scale, and only Tesla is doing this right. They are planning for the long haul, not bursting into the market on a gamble.
Re:fail (Score:5, Informative)
That particular episode of Top Gear is (especially) derided as FUD. The car never ran out of batteries, they never recharged the car (just an off the cuff remark about it taking 16 hours to charge from their windmill(!?)), and the 'brake down' that they reported was a blown fuse (not a drive train one either, just a regular one like could and does happen in every car). The put the car into neutral and pushed it off the track to 'show what would happen if you ran out of charge', obviously you could say the exact same thing about running out of gas on the track.
To me, that really brought to light just how much the people at Top Gear are biased towards the cars that they like and against the cars that they don't.
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To me, that really brought to light just how much the people at Top Gear are biased towards the cars that they like and against the cars that they don't.
And this was new to you? I think it's so strikingly obvious that anyone wanting to learn anything about cars isn't getting anything from Top Gear. I watch it for the Lulz.