7 ms·

Tesla Prices IPO At $17 Per Share

19 points by transburgh 16y ago

marciovm123 16y ago
The market cap is much more instructive to have in the title - price per share by itself carries no information.
- MJR 16y ago
  It does if you're trying to figure out how many shares you can buy. It's also of note because $17 is higher than the planned $14-16 range.
  - eru 16y ago
    Number of shares I can buy carries no information. Percentage of the company that I can own for x dollars carries some information. Although if you already knew about the earlier plans you mention, than the new 17$ per share is news. (I was not that informed.)
- ca98am79 16y ago
  I agree with you mostly, but price per share does carry some information. You don't think there would be any difference if the price per share were $0.00001 as opposed to $1,000,000 - even if the market cap were the same? There is a subtle difference because the price is determined by the buying and selling of the shares - and different types of people would be buying and selling the shares at these prices.
gamble 16y ago
Much as I like the Roadster, I'm extremely pessimistic about Tesla's chances. Established auto companies with much deeper pockets would have trouble bringing the Model S to market. Tesla hasn't been very successful selling the Roadster, a car whose $100k price tag ensures it's selling to a demographic that doesn't care about service, warranty, or battery-replacement costs. The Model S will be an order of magnitude more difficult to sell, even assuming they meet their own overly-optimistic development schedule.
- pmccool 16y ago
  Seems like a good time to try their luck though. Demand for non-petroleum powered cars is building, nobody is established as a manufacturer and it seems the technology is now up to the job. It's still a gamble, but the odds seem a bit better than usual.
- eston 16y ago
  I've seen too much news trying to spin the "Tesla raises $221MM" as a huge number. Sure, for most of us that hack away on web apps, $221 million is insanely high, but it's important to remember that Tesla's operating at a loss of nearly half a billion right now and is still losing money. The S is necessary to turn the cash flow around.
whatusername 16y ago
$1.5 Billion Market Cap. Will be interesting to see where it is in a week.
- eru 16y ago
  I don't really get why anybody plans any IPO prices. Shouldn't auctions be the best tool for the current owners to get as much money as they can?
  - ars 16y ago
    They actually are auctions, just not public ones. Silent auctions, where the bidders communicate privately with the seller. The buyers set a price they will pay, possibly a price x number of shares matrix. Then the company picks a price to maximize the amount brought in.
    - eru 16y ago
      Yes, more or less. But you often see shares go up by quote a lot on their first day. That should not happen.
    - eru 16y ago
      But why did the share price then go up on the first day after the IPO? (And why does it tend to do this for a lot of companies?)
po 16y ago
I really like Tesla (the company) but I would avoid Tesla (the stock). You're buying an awful lot of risk for that price. In fact I would be surprised if there weren't already significant amount of short sellers interested in this.
hop 16y ago
Massive competition from many established companies, $300M+ tooling costs to roll out a new car, low profit margins, high marketing costs, long sales cycles, etc... Auto manufactuing is a bad business to be in, maybe second only to operating airlines. And Tesla owns no special ip on their battery tech, they will likely have to do a lot of dilution in the future to stay alive. That said, I wish them luck, and if anyone can do it, it's Elon Musk.
deleted 16y ago
[deleted]

19 points by transburgh 16y ago

marciovm123 16y ago

The market cap is much more instructive to have in the title - price per share by itself carries no information.

MJR 16y ago
It does if you're trying to figure out how many shares you can buy. It's also of note because $17 is higher than the planned $14-16 range.
- eru 16y ago
  Number of shares I can buy carries no information. Percentage of the company that I can own for x dollars carries some information. Although if you already knew about the earlier plans you mention, than the new 17$ per share is news. (I was not that informed.)
ca98am79 16y ago
I agree with you mostly, but price per share does carry some information. You don't think there would be any difference if the price per share were $0.00001 as opposed to $1,000,000 - even if the market cap were the same? There is a subtle difference because the price is determined by the buying and selling of the shares - and different types of people would be buying and selling the shares at these prices.

gamble 16y ago

Much as I like the Roadster, I'm extremely pessimistic about Tesla's chances. Established auto companies with much deeper pockets would have trouble bringing the Model S to market. Tesla hasn't been very successful selling the Roadster, a car whose $100k price tag ensures it's selling to a demographic that doesn't care about service, warranty, or battery-replacement costs. The Model S will be an order of magnitude more difficult to sell, even assuming they meet their own overly-optimistic development schedule.

pmccool 16y ago
Seems like a good time to try their luck though. Demand for non-petroleum powered cars is building, nobody is established as a manufacturer and it seems the technology is now up to the job. It's still a gamble, but the odds seem a bit better than usual.
eston 16y ago
I've seen too much news trying to spin the "Tesla raises $221MM" as a huge number. Sure, for most of us that hack away on web apps, $221 million is insanely high, but it's important to remember that Tesla's operating at a loss of nearly half a billion right now and is still losing money. The S is necessary to turn the cash flow around.

whatusername 16y ago

$1.5 Billion Market Cap. Will be interesting to see where it is in a week.

eru 16y ago
I don't really get why anybody plans any IPO prices. Shouldn't auctions be the best tool for the current owners to get as much money as they can?
- ars 16y ago
  They actually are auctions, just not public ones. Silent auctions, where the bidders communicate privately with the seller. The buyers set a price they will pay, possibly a price x number of shares matrix. Then the company picks a price to maximize the amount brought in.
  - eru 16y ago
    Yes, more or less. But you often see shares go up by quote a lot on their first day. That should not happen.
  - eru 16y ago
    But why did the share price then go up on the first day after the IPO? (And why does it tend to do this for a lot of companies?)

po 16y ago

I really like Tesla (the company) but I would avoid Tesla (the stock). You're buying an awful lot of risk for that price. In fact I would be surprised if there weren't already significant amount of short sellers interested in this.

hop 16y ago

Massive competition from many established companies, $300M+ tooling costs to roll out a new car, low profit margins, high marketing costs, long sales cycles, etc... Auto manufactuing is a bad business to be in, maybe second only to operating airlines. And Tesla owns no special ip on their battery tech, they will likely have to do a lot of dilution in the future to stay alive. That said, I wish them luck, and if anyone can do it, it's Elon Musk.

deleted 16y ago

[deleted]