SAN FRANCISCO — Shares of electric car maker Tesla Motors rallied in afternoon trading Tuesday, trading 32% above their IPO offer price at one point in the session. The stock debuted at $19, above the $17 a share offer price, but eventually slipped to a low of $17.54. The shares managed to stage a gradual climb back, hitting a high of $22 in the afternoon. The stock last traded at $21.49.
And some analysis from the Motley Fool:
The daunting road to success Tesla says that it needs to sell 20,000 Model S autos a year to make this thing work. But the Model S and Tesla — a start-up that has yet to book a profitable quarter, and that has sold about a thousand cars ever — are going up against companies with vast R&D resources and brands that are global household names. And they’re doing it with a significant cost/price disadvantage, no experience in this kind of manufacturing, and with no disruptive new technology. In other words, there’s no real first-mover advantage.
How do they win? For that matter, how do they survive? For investors, where’s the upside?
I can’t come up with a convincing answer to those questions. If you can, buy the stock.
Ask Steven Chu, as he’s the one who loaned Tesla close to a half-a-billion dollars, conditional on the success of this IPO.
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