Tesla stock is now back below its IPO price.

http://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1278446400000&chddm=1954&chls=IntervalBasedLine&q=NASDAQ:TSLA&ntsp=0

by phreeza • 16 years ago

43 69 16 years ago

google.com

jeb• 16 years ago

The speculators done gone made a lot of money off the geeks. Tesla was a typical speculator IPO, now the reality of the risk facing the company will set in and the price will go to its standard level till they start to show real potential.

padmanabhan01• 16 years ago

If the speculators are able to make money off the geeks, who are the real geeks then?

phreeza2• 16 years ago

The finance geeks made money off the technology geeks?

cynicalkane• 16 years ago

Are you talking about the geeks at Tesla or the geeks who bought stock after the price jumped?

If the former, companies often IPO at prices below what they're worth--if the IPO is issued at a fair price, then it's Tesla that benefits, not the speculators. If the latter, buying stock because it's going up is an act of speculation, not necessarily geekishness.

eru6• 16 years ago

Yes, I don't really get why any company would IPO below their fair price. Every time I see a company's stock go up massively on the first day, I ask me "Why did they not charge a higher price for their stock in the first place?".

hugh38• 16 years ago

Pretty much exactly what that guy from Mad Money predicted would happen.

I wouldn't invest in Tesla. Either electric cars take off or they don't, but if they do then the big car companies can easily muscle in and eat Tesla's lunch. Nissan and Chevy both have electric cars coming out soon which will present a much better value proposition than the Tesla Model S.

bdlang• 16 years ago

I don't believe the IPO is about the model S; it's about ramping up to build a sub 30K (or was it 20K) model at the newly acquired plant in Nor Cal, partnered with Toyota.

jaekwon3• 16 years ago

citations? I thought it was about the model S, e.g. model S _is_ their consumer model.

wikipedia: "On May 20, 2010 Tesla Motors announced it would form a partnership with Toyota to produce a new lower-priced model along with the Model S at the former NUMMI assembly plant in Fremont, California.[6]"

pavs• 16 years ago

To the best of my knowledge, none of the big car manufacturers have any electric cars that is anywhere comparable to the mileage of Tesla. The second best option, Nissan Leaf, has less than half of Tesla's mileage.

Can anyone else verify this?

ynniv• 16 years ago

That may be true, but only because the Tesla Roadster has twice the battery capacity (53 kWh vs Leaf's 24 kWh). The Roadster battery costs about $36,000, which is more than the sticker price of a Leaf. The Roadster is supposed to get 21.7 kWh/100mi, which is about the same as the Leaf (22.5 kWh/100 mi) and the Volt (25 kWh/100 mi). Given the current (im)maturity of the electric car industry, I would say those numbers are too close to differentiate.

[http://en.wikipedia.org/wiki/Tesla_Roadster]

[http://en.wikipedia.org/wiki/Nissan_Leaf]

[http://www.businessinsider.com/theres-no-way-the-model-s-jus...]

hugh38• 16 years ago

I assume by "mileage" you mean "range"? But yes, the Leaf has a shorter range than the Tesla Roadster, and is also a lot cheaper. Price vs range is the basic tradeoff when building an electric car. Nissan could build a more expensive Leaf with a longer range if they thought there was a market for it.

I like the Chevy Volt's best-of-both-worlds solution, since it will do your sub-40-mile commute on electricity but still fire up its petrol-powered generator if you want to do hundreds of miles on the weekend. For an electric car, a zero risk of getting stranded is a huge selling point.

neurotech1• 16 years ago

Don't forget that Toyota has a stake in Tesla, and they are a big car company. It's not inconceivable that Toyota could assist in distribution, as it doesn't directly compete against the Prius.

ghurlman• 16 years ago

It wouldn't surprise me one bit if down the road Tesla became a Toyota-owned & operated brand, much like Scion is today.

hugh38• 16 years ago

Or they could say "thanks for the technology, suckers!", write off their piddly $50 million investment in Tesla, and start cranking out electric Corollas from a factory in Yokohama and/or Guangzhou.

huhtenberg2• 16 years ago

> muscle in and eat Tesla's lunch

This would largely depend on whether Tesla would strive to become a mainstream car maker or would choose to retain its focus on building luxury/exotic cars. Think Aston Martin kind of company.

Though they have already announced an average-priced sedan version that was scheduled for mass production in 2012, so I guess they are going after the behemoths.

keltex• 16 years ago

You mean the Aston Martin that was part of Ford until 2007?

Ford still own a portion of and to which they contribute the parts and engineering know how.

sbov• 16 years ago

Last I heard the model S was going to start at 49k. That definitely is in the luxury car price range, and not competition with toyota/nissan/etc.

hugh38• 16 years ago

Luxury and exotic cars is a terrible business to be in. Small-volume supercar manufacturers pop in and out of existence every few years, leaving behind tiny production runs of awesome-looking machines and no spare parts.

The only luxury/exotic car manufacturers which have survived are the ones which managed to pick up enough of a history to be bought out by a much larger mass-market brand as a halo. afaik they mostly operate at a loss. Bentley, Lamborghini and Bugatti belong to VW. Ferrari is Fiat. Lotus is Proton, and Rolls-Royce gets passed around like a cheap hooker. Only Aston Martin is currently owned by someone other than another car company, but that may not last.

phreeza2• 16 years ago

By that logic, no startup that somehow touches on established players markets would be worth doing.

A bit like saying Writely should never have built a web-based text processor because Microsoft can "easily muscle in" and eat their lunch.

hugh38• 16 years ago

What I should have said is that the car industry, unlike the software industry, has huge advantages for big players (due to the enormous capital cost of... well, nearly everything), and small advantages for first movers (due to the near-nonexistent network effects).

nostrademons3• 16 years ago

That's largely true.

Writely and Word are in different markets - the market for web-based cloud word processors is very different than the one for full-featured desktop word processors. Same goes for most of the web startups that have succeeded.

Somebody is inevitably going to bring up Google, since there were established players in search when Google was founded. But at the time of Google's founding, all the established players in search thought that their business was in portals, leaving the search market itself open for a hungry competitor.

Clayton Christensen has more on this in The Innovator's Dilemma/Solution. Innovations that make things better for an established market's existing customers tend to be sustaining innovations, benefiting entrenched players. Even if a startup gets a foothold on one, they can and will be bought out or outcompeted by a big firm, which has more resources and every incentive to pour them into development.

Innovations that make things better for a new and untapped customer base, however, tend to be disruptive innovations, the sort of which new successful startups are made. The defining characteristic of disruptive innovations is that they're less profitable than sustaining innovations: therefore, at every point in time, the large entrenched competitors have every incentive not to succeed in the startup's market. Things like the PC for IBM, the web for Microsoft, free online access for newspapers, and search for Altavista.

Note that in all cases, those companies did enter the new market, they just didn't succeed in it. Because it was not in the company's interest to succeed: A success would mean that the company's overall profit is less than it started with, which is awfully hard to justify to shareholders.

I'm not entirely sure which category Tesla fits into, but I'm having a tough time seeing a $109k roadster and $57k sedan as disruptive innovations, which usually target cheaper market segments that big companies overlook as unprofitable.

bobbyi• 16 years ago

> Pretty much exactly what that guy from Mad Money predicted would happen.

How so? Mad Money was bearish on Tesla as a company and so far since its IPO it is beating the market as a whole (the Nasdaq Comp and the S&P 500).

hugh38• 16 years ago

Well, he predicted a first-day bump followed by a long slide. There's still room for him to be proven wrong, though.

mattmcknight• 16 years ago

I did buy some, but I only sold about half when it was up 50%. I own a lot more of BYD, which is way up from when I got hold of it. I am still not sure the whole electric car concept makes sense yet.

One thing about plugin electrics that gets me though is that, for me, they switch from gasoline powered energy to coal power off of the grid, which would seem to be a bit more carbon-y.

Another slightly amusing negative is that the current Energy bill winding its way through congress looks like it is going to put a carbon tax on utilities (where the power for the cars would be paid) and not on gasoline, thus making it potentially more expensive for electric power than gas power (and making the scapegoat utility companies appear to be raising rates for customers while the politically unpopular gas tax is avoided.

timwiseman• 16 years ago

If Tesla develops relatively good technology and a good patent portfolio then it is much more likely that they would get purchased than simply be out competed. If they are purchased while on the path to success it is likely that the founders and many early investors will make a very nice sum in the process.

kno• 16 years ago

I will argue that this is a good time to buy Tesla Stocks; this is a time for real geeks to make money.

jaekwon3• 16 years ago

Yes, if you have spare capital, invest some in Tesla now with the risk of losing most of your investment. Think long term.

Depending on the general mood of the stock market, I think the price will hover around 15~17 until we hear more news in the coming weeks.

ars2• 16 years ago

No, not yet. A lot of people are going to panic sell. Then you will have those who will hold on hoping it goes back up at least to what they paid for it. The moment it does they too will sell.

Wait till it stops going down, goes up for a bit, then down again. Only then think about buying.

And for those who are hoping it goes up to at least what you paid for it: Please be aware you ALREADY lost your money. Waiting for it to go back up is poor investment strategy. You don't loose your money when you sell - you loose it instantly. Either you think it's a good buy right now (in which case buy some more, or hold what you have), or you don't think it's a good buy _right_now_, in which case sell and it makes no difference what you paid for it.

Waiting for it to go back to what you paid for it will make you feel better, but in the long run you will loose money that way. Only keep a stock if you think it's a good buy at all times - pay absolutely no attention to what you paid for it. The present, and future is all that matters, the past doesn't.

feverishaaron• 16 years ago

The real smart geeks road the wave to 40% then shorted them on the way back down.

bryanh• 16 years ago

I'd be surprised if there was sufficient liquidity for shorts so soon after the IPO.

flipp• 16 years ago

http://twitter.com/jackflips/status/17370679933 :)

arnorhs3• 16 years ago

Maybe a perfect time to buy?

Their brand is now recognized as the electric car manufacturer. As long as this trend continues, they will submerge as the winner.

I've also heard that their technology is somewhat unique and that they've found solutions to many hard problems. Do they have any patents?

pchristensen2• 16 years ago

...they will submerge...

Freudian slip?

arnorhs3• 16 years ago

Sorry about that. You're right. http://www.google.is/search?q=define:submerge

I'm not a native English speaker, so sometimes it's difficult to find the right word and something pops up in my mind and I think it's correct.

Silhouette• 16 years ago

> Their brand is now recognized as the electric car manufacturer.

The question I would ask before investing is: how many people care? It's good to be the market leader, but still not worth much if your whole market is tiny.

Maybe this is a national perspective thing: I'm in the UK, and the car market does vary more than most from country to country. But over here, I'd say the main interest in new drives today is in hybrids rather than pure electric cars. The network of charging stations required for pure electric just doesn't exist yet. In hybrid world, the Prius rules for everyday driving and Lexus have run a good PR campaign to claim the high end of the market, and it's hard to see how anything Tesla have proposed so far would create any significant shift.

mattmaroon• 16 years ago

Not surprising. The market's collective thinking is normally pretty short-term, and shares of a company that's forecast involves a best case scenario of generating real revenues 2 years from now wouldn't be expected to be in-demand.

nostrademons3• 16 years ago

It's interesting how this has changed since the dot-com boom, where shares of AMZN in 1998 had the same price that they did in 2008, even though it wasn't expected to turn a profit until 2002.

tocomment2• 16 years ago

Why are there no stock options (calls/puts) offered for TSLA? Will that change in the future?

joe-mccann2• 16 years ago

Yes. Not enough historical volatility currently to price options contracts accurately.

tocomment2• 16 years ago

Thanks. I didn't think about that. How much history would they want?

joe-mccann2• 16 years ago

Actually, the reason for the insane run-up on it's inital day and second day of trading had very little to do with speculation, but more to do with TSLA being an "extremely hard to borrow" stock on those days. When a stock is hard to borrow, it means it is nearly impossible to short sale the stock. Think AIG when they were melting down. That was a stock that no one wanted loan out for short sales because at the time, their demise was imminent. Not necessarily the same thing with TSLA, but that's what hard to borrow equates to...

So all theories and ideas of why the run up and why the subsequent sell off are essentially wrong. When a stock can only go in one direction, then it can only go in that direction.

Tesla stock is now back below its IPO price.

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