2 Comments

Summary:

Defying gravity, revenues, and profits, electric car maker Tesla Motor’s shares hit a record high on Monday at close to $33. Tesla’s stock started trending up late last week after it’s third quarter earnings report, which showed a quarter loss that was smaller than analysts expected.

Exterior Tesla Web

Defying gravity, revenues, and profits, electric car maker Tesla Motor’s shares hit a record high on Monday at close to $33. Tesla’s stock started trending up late last week after it’s third quarter earnings report, which showed a quarter loss that was smaller than analysts expected.

Tesla priced its IPO at $17 per share back in June, its shares started trading at $19 on the morning of its debut, and its stock traded up 40.5 percent on its first day. While Tesla’s stock has traded around $20 for months, this is one of the first times Tesla’s stock has soared up into the $30′s per share range (it hit $30 briefly the day after its debut, too).

Will the high price out last the lock-up period? Tesla’s selling stockholders, directors, officers and employees are subject to a lock-up period for 180 days after the IPO (underwriters typically secure lock-up agreements to prevent a company’s stock from gushing too quickly onto the market). If Tesla’s stock remains this high when that period ends, its shareholders will be pretty stoked.

In the near term, Tesla has its carefully-crafted buzz and coolness factor on its side. Tesla’s been keeping in the news by letting out a steady stream of information about its launches and partnerships, and giving factory tours. Wall Street knows that Tesla won’t turn a profit, or generate substantial revenues until it starts selling its Model S sedan in 2012. (Here’s 10 ways that Tesla will try to keep its stock up).

But how long the goodwill will last without profits and with little revenue is anyone’s guess. Tesla lost $34.2 million, or 38 cents per share, in the most recent quarter, and Tesla CEO Elon Musk reiterated in the quarterly call that quarter-on-quarter profits aren’t a company goal.

Lithium ion battery maker A123 Systems, which also had a hot IPO late last year, slid from levels above $20 after going public to around $9 today. Some analysts think Tesla could follow the same path.

What do you think? Where is Tesla’s stock headed in the short and long term?

For more on vehicles and IT check out GigaOM Pro (subscription required):

  1. I have been watching Tesla, their share prices and that of the dark green industry for some time.

    I didn’t get in on the Tesla action at the right time (when they floated) and I’m kicking myself now but I believe that, as this article suggests there will be another boom in EV company stock prices in 2012 – especially Tesla, with their release of the Model S.

    The EV industry will also have gained greater press coverage and momentum in terms of R&D by then as well as infrastructure support from participating countries.

    Viva the green revolution :D Here’s hoping investors and the markets can all profit while we save the planet!

    Share
  2. @AFD, I think it will go down substantially and then back up closer 2012 — so maybe buy when it goes down enough.

    Share

Comments have been disabled for this post