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During the IPO season Francis Gaskins, editor of IPOdesktop.com, regularly appears on CNBC TV, Bloomberg, thestreet.com & other financial cable channels. On the day of the Visa IPO he appeared on four cable TV financial shows including Bloomberg & CNBC. Over the past five years he has... More
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  • Tesla 100% Electric Car IPO – is it a go?  0 comments
    Jun 22, 2010 2:40 PM | about stocks: TSLA, TM, F, AONEQ, HMC, VLKAY

    Tesla IPO scheduled for Tuesday, June 29, $166mm
    . $1.4bb market cap at price range mid-point of $15
    . see financial analysis in IPOreport

    BUSINESS
    Manufacturing & directly selling 100% electric cars, aiming primarily at the premium sedan market, $50,000+.

    SUMMARY
    Tesla is the only pure play in the upcoming growing 100% electric car market.  And the company is very good at generating pr buzz. 

    However, there are significant uncertainties regarding the projected 20,000 units per year production from the Model S sedan, not yet fully designed and production facilities are not yet actually acquired.

    “We anticipate that we will experience an increase in losses and may experience a decrease in automotive sales revenues prior to the launch of the Model S.” 

    Therefore, until major milestones are met longer term investors may have difficulty defending Tesla’s expected $1.4bb market cap.

    see financial analysis in IPOreport

    PROBLEMS

    Anticipates increasing losses
    Untested business model
    . Straight to the consumer from the manufacturer business model. 
    . Hasn’t been done successfully before in the automobile industry
    Model S not yet fully designed
    . No production manufacturing or service experience. 
    . “We are in an early stage of planning for this facility” which is the facility expected to turn out 20,000 cars per year starting sometime in 2012.”
    Distribution
    Plans to open up 50 retail stores worldwide, now has 12 retail stores, costs about $1mm for each store.
    Service
    Customers must transport the car to a retail store/service center, or have a technician go to the location
    Competition
    Daimler, Lexus, Audi, Renault, Mitsubishi, Volkswagen, Subaru, Nissan, Toyota, Honda, Ford and GM are all developing electric cars of their own.

    PLUSES
    Lowest cost battery pack
    “We believe we have engineered what is currently the lowest cost battery pack when measured as a function of cost per kilowatt-hour.”
    Intellectual property
    “As of June 14, 2010, we had 14 issued patents and 97 pending patent applications with the United States Patent and Trademark Office as well as numerous foreign patent applications in a broad range of areas related to our powertrain.”

    see financial analysis in IPOreport




    Disclosure: none

    Stocks: TSLA, TM, F, AONEQ, HMC, VLKAY
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