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Do I Hear $213 Million?
777Date: Thursday, 28 Oct 2010, 21.30 | Message # 1
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Tomorrow's initial public offering of stock in Tesla could be a make-or-break event for the electric-car maker. After all, the company has lost money every single quarter since its inception in 2003, burning through $230.5 million in cash along the way. It expects to continue to flush money for at least another couple of years, until its affordable -- compared to the $109,000 Roadster, that is -- Model S sedan is ready to go. Meanwhile, CEO and main shareholder Elon Musk, whose personal fortune from the sale of PayPal and other companies has thus far kept the company afloat, is facing liquidity issues.

But on the plus side of the ledger, Toyota has agreed to buy $50 million of stock when it goes on sale tomorrow, and the two companies may -- though this is still a very loose idea at this point -- collaborate or somehow work together in the future. Not bad having the world's largest automaker on your side. Also, in a move that speaks of increased confidence from the company, as well as demand from investors, Tesla announced today in revised Securities and Exchange Commission paperwork that it was increasing the number of shares offered, from 11.1 million to 13.3 million. Major shareholders will sell more stock, as well -- 1.42 million shares, up from 1.1 million.

The price per share is still expected to be $14 to $16, which means the company now looks to raise about $213 million, up from the $185 million previously reported -- still a far cry from the $465 million loan given to Tesla by Energy Department, but necessary cash to get future products like the Model S up and running.

Tomorrow's IPO marks the first public offering by a U.S. automaker since Ford went public in 1956.


 
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