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How Tesla Will Try to Keep Its Stock Up

Tesla’s debut on the Nasdaq yesterday was met with a shockingly hearty embrace. The electric car maker started the day at $19 on Tuesday, above its estimated range of $14 to $16, and as of the middle of the day on Wednesday traded as high as $30.42. That’s despite the fact that as columnist Drew Voros put it: “Like the emperor with no clothes, Tesla is a company with no financial fundamentals that warrant it being a public security, much less one that pops on its first day of trading.”

So the problem for Tesla now is keeping its stock from tanking, at least for the next 180 days, which is the lock-up period for Tesla’s selling stockholders, directors, officers and employees (underwriters typically secure lock-up agreements to prevent a company’s stock from gushing too quickly onto the market). If Tesla can keep its stock riding smoothly enough, its executives (in particular CEO Elon Musk) will be able to turn some of their stakes on paper into cash.

But Tesla won’t actually be producing its next-gen sedan the Model S until 2012 at the earliest, and the company plans to stop producing its first-gen $100,000 Roadster in 2011. That leaves the rest of 2010, the twelve months of 2011, and potentially a bunch of time in 2012 (Tesla has a history of delays, and it has acknowledged in SEC filings that the Model S could fall behind schedule) for investors to ponder the lack of revenues and profits coming out of Tesla.

The answer to the gap?: press releases. The fluffy kind that will remind Wall Street that yes, there’s some sort of product and sales coming, sometime soon(ish). Here’s 10 press releases to watch for from Tesla over the next 24 months that it will likely use to distract from the fact that it’s facing a big ol’ drought.

1). Look How High Performance the Roadster Is!: Tesla has put a lot of its development dollars into making the Roadster a high-end luxury sports car, and it’s still the only electric vehicle sold today in the U.S. for driving at highway speeds. Expect to see a significant amount of press releases, company blog posts and media events around how fast the Roadster goes, how well it accelerates and how long the range is.

2). Celebrities Drive Tesla Cars: The Roadster has carried actors to the Oscars, is owned by celebrities like George Clooney, Matt Damon and Red Hot Chili Pepper’s Flea, and earlier this month Leonardo DiCaprio agreed to promote the car. Yes we get it, if you drive one of Tesla’s cars you’re a celebrity.

3). The Model S Is Coming Soon! The next-generation Model S won’t go into commercial production until 2012, but there are a variety of PR opportunities along the way to developing the Model S over the next two years. Particularly because Tesla isn’t really that far along in the design of the Model S, and says in its S-1: “We currently have a drivable early prototype of the Model S, but do not have a full production intent prototype, a final design, a built-out manufacturing facility or a manufacturing process.” Expect to see major media events around each of these milestones in the development process.

4). Even More After Model S!: While the Model is still two years away, don’t be surprised to see more announcements from Tesla about third, fourth and even fifth-gen electric vehicles in the — very full — pipeline. According to Tesla’s S-1, it could work on “a crossover/sport utility vehicle, van or a cabriolet.” Tesla CEO Elon Musk has been using that tactic since 2008, when he first told me about the potential for a $20,000 third-gen EV, and he emphasized the Model S as a platform for future vehicles in his “road show” pitch to prospective investors this month.

5). We Deliver Green Jobs: Tesla says its Model S factory will create 1,000 jobs by the time production starts in 2012. Musk has also said he believes the partnership with Toyota could result in 10,000 jobs — about half of them with Tesla and half through suppliers.

6). BFFs With Uncle Sam: Tesla scored a coveted $465 million in loans from the Department of Energy, and those funds can only be accessed over a period of three years as certain milestones are met. But that also means each time a milestone is met — like completion of an environmental assessment for the factory — Tesla can point to its accomplishments. Expect messages hinting that since the government is supporting this effort, so you should sign up to buy a car from them one day.

7). Tesla is Good for the Planet: With the IPO, the celebrity-citings, and the CEO’s divorce, it’s easy to forget about the most important part of Tesla: that it has the potential to cut down on carbon emissions and oil consumption. While the power grid might not run on clean power today, as soon as it is electric vehicles will be truly green, and replacing oil is almost always a good thing. Tesla says the Roadster is twice as energy efficient as a Prius and six times as energy efficient as gasoline competitors, and we can expect the company to tout similar figures in the next few years.

8). Musk Star Power: The company’s CEO and main backer Elon Musk is a celebrity in his own right, with a cameo in the movie Iron Man II and having made his former wealth off of PayPal. While this might not generate press releases, get used to seeing Musk’s mug all over the place keeping his profile high.

9). Tesla’s Worldwide Domination: Tesla plans to use a portion of its net proceeds of its IPO to fund expansion of Tesla stores to 50 stores globally. And guess what, every single one of those store openings will get its own press release and media event.

10). High Profile Partners: Tesla has a variety of deals with large companies like Toyota (s TM), and Daimler (s DAI), but the company has a habit of making its deals sound a lot bigger than they actually are. There’s no defined Toyota technology development deal, just the fact that Toyota agreed to acquire a $50 million stake in Tesla. Expect to see other partnerships announced and inflated.

For more research on cleantech financing on GigaOM Pro (subscription required):

Cleantech Financing Trends: 2010 and Beyond

IT Opportunities in Electric Vehicle Management

9 Responses to “How Tesla Will Try to Keep Its Stock Up”

  1. Tesla will do well b/c their cars are wickly hot and we all are going to want them as we see more of them in the neighborhood, right??

    I just want one so that I can say that I no longer pay for gas every week (I guess I don’t mind paying in other ways–price, interest, and home electricity–with my luck it will crash the grid and the price of it will to dollars per KwH!!).

  2. electrovelocity

    @ Paul Norder – Those are some pretty serious accusations, do you have sources for them that you quote? I’ve only ever heard good things about Elon Musk.

    Katie, loved the article :)

  3. Paul Norder

    Why to avoid the Tesla IPO like the plague:

    The CEO and senior staff lied to the City of San Jose about building their car factory there and those communications are actionable.

    The CEO and senior staff lied to multiple other cities about building their car factory there and those communications are actionable.

    The CEO has been sued by his staff, his wife, his business partners and his suppliers for manipulation and unethical behavior.

    The CEO paid GQ magazine to write a story about him to help him get dates. The CEO paid the marketing group for Iron Man to say that Iron Man was based on him. History has shown that megalomaniacs have destroyed every company they have run.

    The CEO cheated on his wife with escorts while married. The values of the CEO are the values of the Company.

    The car electromagnetic radiation fields from the battery pack cause cancer.

    The bribed officials to get their federal loan and the funds expended by them to get that loan are being traced back to sources. The McKinsey guys at DOE are connected on paper to Tesla in extensive conflicts of interest.

    The CEO put people into Zap, XP, Ecomotors, Aptera and other electric car companies to sabotage and spy on them. He spied on all of his staff with a fake email campaign. Those situations are actionable.

    He was $100,000.00 off, PER CAR, on the cost to build each car. The company has blown tens of millions of dollars on work it had to completely dump in the garbage and start over on.

    The company has numerous consumer complaints on price changes, overheating of the battery and charging system and inability to get 220V without huge premiums for the setup.

    Nobody is buying the cars anymore and there are hordes of competitors with better electric cars.

  4. For a small company that is a glorified EV conversion company based in a workshop behind a car dealership, this stratospheric $2B valuation seems to be based on a few endorsements (Toyota / Daimler / DoE / Google) and a fairly plain looking concept car.

    Lets hope this doesn’t turn into a joke penny stock like Zap Motors. (who also parade a lot of flashy prototypes and generate thousands of press releases)

  5. Katie,

    I’m pleased to read your perspective on this, especially given that most people have simply been heralding the Tesla IPO like a new Twilight movie. The gap you mention is going to be difficult. While I believe Elon Musk is one of the greatest and most inventive entrepreneurs of our time, Tesla is going to have rather lumpy product portfolio going forward. Even if the Model S comes out on time, the SEC filing reveals that the next gen Roadster will be made in-house by Tesla (without Lotus) and come out a year after the Model S. Can they parallel path Model S final year of development and the beginnings of the next Roadster platform? That’s tough.

  6. coolrepublica

    Want to see the future of Telsa (TSLA) take a look at this chart (AONE).

    From what I saw today Telsa is now a momo stock. That means that when the traders are gone the stock is in trouble. I see no signs that people are investing. Just trading it.