The Wall Street Journal
The Palo Alto, Calif., company, which makes a luxury all-electric car that sells for $109,000, plans to sell 11.1 million shares between $14 and $16 a share. It has applied to list on the Nasdaq under the symbol TSLA.
Although Tesla has never been profitable and had sold only 1,063 of its Roadster models as of March 31, the company's offering has drawn the attention of green energy investors and high-end car buffs alike. The vehicles can accelerate to 60 miles an hour in about four seconds and are based on a model made by Lotus, the British luxury sports car maker.
The company is working on launching a $50,000 sedan by 2012. That sedan will be the first Tesla to be produced in larger volume for more of a mass audience, and its design will be a template for further mass-produced Tesla models.
Tesla, whose chairman and chief executive is Paypal founder Elon Musk, is going public just as it expects to sell fewer cars. It won't be selling its current Roadster model after 2011, leaving a gap before it rolls out the sedan, known as a Model S.
Following the IPO, Musk will own at least 28.8% of the public shares of the company, according to a regulatory filing.
Immediately following the IPO, Tesla is selling $50 million of its shares at the offering price to Toyota Motor Corp. (7203.TO, TM) as part of an agreement reached last month with the world's largest automaker. At a $15 offering price, Toyota would have 3.33 million shares and less than 3% ownership of the company. Daimler AG (DAI.XE), through its affiliate Blackstar Investco LLC, had a stake of 9.6% prior to the offering, but the stake will likely be 7% or less afterwards, a person familiar with the matter said.
While electric automobiles are seen as an emerging technology, they are considered an early-stage industry that could take a decade or more to become more established. That could make the offering tricky, given the difficulties facing the IPO market.
Tesla plans to spend $42 million to purchase the former New United Motor Manufacturing Inc. plant in Fremont, Calif., a few months after the IPO. The plant is owned by Toyota and Motors Liquidation Co., which is the remains of the former General Motors Corp. that is in bankruptcy.
As a condition of Tesla's $465 million loan facility from the U.S. Department of Energy, 50% of the proceeds from the IPO must be set aside in an account to pay for capital expenses related to building the Model S, which would include purchasing the plant. The DOE loan can be used to reimburse Tesla for the costs.
Investors have forced several companies to reduce their terms in order to get deals done, and the pace of postponements and cancellations has been rising. In a positive sign, this week's high-profile offering, the $339 million IPO for CBOE Holdings Inc. (CBOE), priced at the top of its range and rose in early trade on its Tuesday debut.
In its prospectus, released Tuesday, Tesla said it had a loss of $25.5 million in the first quarter of 2010, compared with as loss of $16.0 million a year earlier. For all of 2009, the company's loss narrowed to $55.7 million from $82.8 million a year earlier.
Automobile sales, including zero-emission vehicle credit sales, totaled $20.6 million in the first quarter, down slightly from $20.9 million a year earlier. Sales for all of 2009 totaled $111.9 million, up sharply from $14.7 million in 2008.
Although Tesla has never been profitable and had sold only 1,063 of its Roadster models as of March 31, the company's offering has drawn the attention of green energy investors and high-end car buffs alike. The vehicles can accelerate to 60 miles an hour in about four seconds and are based on a model made by Lotus, the British luxury sports car maker.
The company is working on launching a $50,000 sedan by 2012. That sedan will be the first Tesla to be produced in larger volume for more of a mass audience, and its design will be a template for further mass-produced Tesla models.
Tesla, whose chairman and chief executive is Paypal founder Elon Musk, is going public just as it expects to sell fewer cars. It won't be selling its current Roadster model after 2011, leaving a gap before it rolls out the sedan, known as a Model S.
Following the IPO, Musk will own at least 28.8% of the public shares of the company, according to a regulatory filing.
Immediately following the IPO, Tesla is selling $50 million of its shares at the offering price to Toyota Motor Corp. (7203.TO, TM) as part of an agreement reached last month with the world's largest automaker. At a $15 offering price, Toyota would have 3.33 million shares and less than 3% ownership of the company. Daimler AG (DAI.XE), through its affiliate Blackstar Investco LLC, had a stake of 9.6% prior to the offering, but the stake will likely be 7% or less afterwards, a person familiar with the matter said.
While electric automobiles are seen as an emerging technology, they are considered an early-stage industry that could take a decade or more to become more established. That could make the offering tricky, given the difficulties facing the IPO market.
Tesla plans to spend $42 million to purchase the former New United Motor Manufacturing Inc. plant in Fremont, Calif., a few months after the IPO. The plant is owned by Toyota and Motors Liquidation Co., which is the remains of the former General Motors Corp. that is in bankruptcy.
As a condition of Tesla's $465 million loan facility from the U.S. Department of Energy, 50% of the proceeds from the IPO must be set aside in an account to pay for capital expenses related to building the Model S, which would include purchasing the plant. The DOE loan can be used to reimburse Tesla for the costs.
Investors have forced several companies to reduce their terms in order to get deals done, and the pace of postponements and cancellations has been rising. In a positive sign, this week's high-profile offering, the $339 million IPO for CBOE Holdings Inc. (CBOE), priced at the top of its range and rose in early trade on its Tuesday debut.
In its prospectus, released Tuesday, Tesla said it had a loss of $25.5 million in the first quarter of 2010, compared with as loss of $16.0 million a year earlier. For all of 2009, the company's loss narrowed to $55.7 million from $82.8 million a year earlier.
Automobile sales, including zero-emission vehicle credit sales, totaled $20.6 million in the first quarter, down slightly from $20.9 million a year earlier. Sales for all of 2009 totaled $111.9 million, up sharply from $14.7 million in 2008.
