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Tesla to begin trading stock Tuesday
By Dana Hull
dhull @mercurynews.com
In one of the most highly anticipated IPOs in Silicon Valley history, Tesla Motors, the maker of all-electric cars that has yet to make a profit, will begin publicly trading its stock Tuesday .
In a sign of investor enthusiasm for the initial public offering  one of the most talked about since Google's and the first for a domestic car maker since Ford's in 1956  the company announced Monday that it would sell 20 percent more shares than it had originally planned. "It's a risky company, but Tesla has already beaten the odds," said veteran technology forecaster Paul Saffo. "They are going public for all the right reasons  they need money to take them to the next level."
CEO Elon Musk, 38, will ring the opening bell of the Nasdaq stock exchange in New York to mark the occasion, and the company's all-electric Roadster and forthcoming Model S sedan will be on display in Times Square. Tesla will trade under the ticker symbol TSLA.
Earlier this month, Tesla said it hoped to raise as much as $178 million by offering 11.1 million shares of common stock at a price range of $14 to $16. But the company boosted its IPO Monday to 13.3 million shares, which could raise $244 million, according to the most recent regulatory filing. Following the IPO, Toyota will purchase an additional $50 million worth of the stock in a private placement.
CEO Elon Musk will sell more than 909,000 shares, which will bring him about $14 million.
Musk will still be the major shareholder, with a 28.4 percent stake in the company. The biggest venture investor, VantagePoint Venture Partners, will sell nearly 239,000 shares.
"Demand seems to be strong for the IPO," said Matt Therian, a research analyst at Renaissance Capital. "They already have a partnership with Daimler and Toyota is investing in them, so they have this validation from major automakers." Daimler is using Tesla's battery technology in trials of its electric "smartfortwo" car.
It's not just Wall Street that's excited about the stock. Doug Cheeseman, 72, is a retired teacher and ecologist. He tapped into his retirement savings to buy a $109,000 Roadster in March of 2009, becoming buyer number 322. Tesla has sold just 1,063 Roadsters as of March 31 of this year.
"Of all the people who own Roadsters, I'm probably the poorest," said Cheeseman, who lives in Saratoga and regularly leads safari trips to Tanzania. "But I'm one of the more fanatical customers." Cheeseman plans to buy about $10,000 worth of Tesla stock this week. "I want to make money, but more than that I want to help Tesla raise the money they need," he said. "The car is so much fun to drive, and I love not having any odor from an exhaust. It's an exciting car and an exciting company, and I want them to succeed."
Tesla has weathered many challenges since its founding in July 2003. Martin Eberhard, one of the original founders, was ousted as CEO and sued Musk for slander. The dispute was ultimately settled out of court. In February, three Tesla employees were killed when a Cessna 310 piloted by a Tesla engineer crashed into an East Palo Alto neighborhood shortly after takeoff.
Tesla's all-electric Roadster is largely seen as a novelty toy for affluent Hollywood stars and venture capitalists. But the company, which has never turned a profit, was among the first automakers to receive a low-interest loan under the Department of Energy's Advanced Technology Vehicle Manufacturing Program. The DOE closed its $465 million loan with Tesla in January.
John Montgomery, an attorney with Montgomery & Hanson, said Silicon Valley is eager to see a successful IPO. "We've had a dearth of IPOs over the last 10 years, and it's really important for the whole ecosystem of the valley for us to build viable companies," Montgomery said. "Tesla isn't just a new company  transportation is ripe for a new paradigm. There's a whole new industry and a whole new infrastructure of batteries and charging stations that goes around it."
Tesla is pinning enormous hopes on the Model S, a $50,000 sedan that it hopes to have in production by 2012. It plans to manufacture the Model S at the former NUMMI plant in Fremont, but has just begun plans for the facility.
Tesla has taken pains to cultivate the 2,200 people who have reserved a Model S. Over the weekend, several received a care package that included a matchbox-size car, a travel mug and a t-shirt.
By Dana Hull
dhull @mercurynews.com
In one of the most highly anticipated IPOs in Silicon Valley history, Tesla Motors, the maker of all-electric cars that has yet to make a profit, will begin publicly trading its stock Tuesday .
In a sign of investor enthusiasm for the initial public offering  one of the most talked about since Google's and the first for a domestic car maker since Ford's in 1956  the company announced Monday that it would sell 20 percent more shares than it had originally planned. "It's a risky company, but Tesla has already beaten the odds," said veteran technology forecaster Paul Saffo. "They are going public for all the right reasons  they need money to take them to the next level."
CEO Elon Musk, 38, will ring the opening bell of the Nasdaq stock exchange in New York to mark the occasion, and the company's all-electric Roadster and forthcoming Model S sedan will be on display in Times Square. Tesla will trade under the ticker symbol TSLA.
Earlier this month, Tesla said it hoped to raise as much as $178 million by offering 11.1 million shares of common stock at a price range of $14 to $16. But the company boosted its IPO Monday to 13.3 million shares, which could raise $244 million, according to the most recent regulatory filing. Following the IPO, Toyota will purchase an additional $50 million worth of the stock in a private placement.
CEO Elon Musk will sell more than 909,000 shares, which will bring him about $14 million.
Musk will still be the major shareholder, with a 28.4 percent stake in the company. The biggest venture investor, VantagePoint Venture Partners, will sell nearly 239,000 shares.
"Demand seems to be strong for the IPO," said Matt Therian, a research analyst at Renaissance Capital. "They already have a partnership with Daimler and Toyota is investing in them, so they have this validation from major automakers." Daimler is using Tesla's battery technology in trials of its electric "smartfortwo" car.
It's not just Wall Street that's excited about the stock. Doug Cheeseman, 72, is a retired teacher and ecologist. He tapped into his retirement savings to buy a $109,000 Roadster in March of 2009, becoming buyer number 322. Tesla has sold just 1,063 Roadsters as of March 31 of this year.
"Of all the people who own Roadsters, I'm probably the poorest," said Cheeseman, who lives in Saratoga and regularly leads safari trips to Tanzania. "But I'm one of the more fanatical customers." Cheeseman plans to buy about $10,000 worth of Tesla stock this week. "I want to make money, but more than that I want to help Tesla raise the money they need," he said. "The car is so much fun to drive, and I love not having any odor from an exhaust. It's an exciting car and an exciting company, and I want them to succeed."
Tesla has weathered many challenges since its founding in July 2003. Martin Eberhard, one of the original founders, was ousted as CEO and sued Musk for slander. The dispute was ultimately settled out of court. In February, three Tesla employees were killed when a Cessna 310 piloted by a Tesla engineer crashed into an East Palo Alto neighborhood shortly after takeoff.
Tesla's all-electric Roadster is largely seen as a novelty toy for affluent Hollywood stars and venture capitalists. But the company, which has never turned a profit, was among the first automakers to receive a low-interest loan under the Department of Energy's Advanced Technology Vehicle Manufacturing Program. The DOE closed its $465 million loan with Tesla in January.
John Montgomery, an attorney with Montgomery & Hanson, said Silicon Valley is eager to see a successful IPO. "We've had a dearth of IPOs over the last 10 years, and it's really important for the whole ecosystem of the valley for us to build viable companies," Montgomery said. "Tesla isn't just a new company  transportation is ripe for a new paradigm. There's a whole new industry and a whole new infrastructure of batteries and charging stations that goes around it."
Tesla is pinning enormous hopes on the Model S, a $50,000 sedan that it hopes to have in production by 2012. It plans to manufacture the Model S at the former NUMMI plant in Fremont, but has just begun plans for the facility.
Tesla has taken pains to cultivate the 2,200 people who have reserved a Model S. Over the weekend, several received a care package that included a matchbox-size car, a travel mug and a t-shirt.
