The most notable IPO of the year came this week from TESLA MOTORS, the first American car company IPO in more then fifty years. It went public on June 29 and raised $226 million from selling 13.3 million shares at $17 each althought the original range for selling was set between $14 and $16. The company's first week on the NASDAQ was completely turbulent with strong ups and dawns. By the end of trading on June 30 the shares reached $29.90, astonishing 57% increase. Only two days later TESLA closed at $19.20 per share with $18.71 day low price. Average volume of shares traded per day was 6,675,642. What a dramatic debut!
TESLA MOTORS, INC. is the Silicon Valley-based manufacturer of all-electric vehicles and advanced electric vehicle power train components. The company was founded in 2003, it has more then 650 employees and it is headquartered in Palo Alto, California. TESLA’s first vehicle, the Tesla Roadster, was introduced in 2008. The next vehicle, four-door sedan called Model S, is planned to be released in 2012. TESLA is cooperating with other companies. Germany’s DAIMLER AG bought a large stake in TESLA MOTORS in 2009 establishing strategic partnership at the same time. The company obtained $400 million governmental grant for green technology businesses. There are European Sales Office and TESLA MOTORS LTD. in UK and a showroom in Copenhagen, Denmark.
Anyway, there are reasons not to be very optimistic at this moment. Tesla Roadster model retails for about $110,000 and the company was never a profitable one. It is expected that more cost-effective Model S could lead the company into profitability but it’ll be launched in a two years while there are major automakers preparing to launch their electrical cars in a meantime. Also, technology to be used is gong to be very similar to the Roadster's that doesn't seem to have advantages comparing it with the NISSAN and FORD all-electric car technologies. TESLA MOTORS is not experienced in massive car producción nor it has extensive dealer networks.
TESLA has annual sales of $111,000,000 and 93,000,000 shares. This means that TESLA has annual sales of $1.93 per share. Not much at all. The operative GPE ratio is 0.16 and Earnings Yield is -2.97%. P/E Ratio is -33.68 and forecasted EPS is $-0.57 per share. The company doesn’t pay dividend. Therefore and taking everything in account, TESLA MOTORS may be considered to be overvalued right now.
LINKS:
TESLA MOTORS: www.teslamotors.com
DAIMLER AG: www.daimler.com
TICKERS:
TESLA MOTORS - NASDAQ: TSLA
DAIMLER AG - OTC: DDAIF.PK
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