

Tesla Motors IPO, Day 1 - mikexstudios
http://www.google.com/finance?q=NASDAQ:TSLA

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quickpost
Well, Elon no longer has a cashflow problem. :)

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apower
Restricted stock sales. Elon is still poor, in case. Poor Elon.

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nitrogen
My dream would be for Tesla Motors to become the biggest and most-loved of the
"big 4" US automakers, along with Toyota, Nissan, and GMFordysler. I respect
the money, engineering, and guts it took to start that company.

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sabj
I am conflicted in regards to situations like this one. For one, I am
interested in invested in vehicles like this not just for the profit
potential, but for what I feel is a genuine social / environmental good; at
the same time, I hate the idea of being burned by putting principles before
money; I continue to search for ways to make socially responsible investments
that don't have the same risk profile as equity.

Thoughts?

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callmeed
There are plenty of ethical/green/socially responsible mutual funds.

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sabj
Right, but what I mean is, something that has less volatility / risk than
equity, but similar 'social good' profile. Like, some vehicle that was
responsible, environmentally sound fixed-income or suchlike. I wish there were
a way to park money short / medium term that was also 'good.' I know (And have
invested in) clean energy ETFs and the like, but not really hitting on what
I'm looking for, which is something where I'd be satisfied with a much lower
return (potential return, obviously) in exchange for just peace of mind
knowing that the investment is at least a bit helpful versus say, just feeding
the financial-services-industrial complex that has caused so many problems.

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austintaylor
<http://www.kiva.org/>

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Timothee
Has anybody bought some today?

I'm also wondering how often an IPO does _not_ go up on the first day(s). I'm
not following this at all, but I remember Google's IPO where it seemed pretty
obvious that a quick flip was guaranteed on the first days (even though it
would have been smart to hold onto it).

I imagine that when Facebook does its IPO a similar excitement will bring
prices up initially.

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jluxenberg
I've always wondered how one gets in on the ground floor of one of these IPOs.
Is it just large institutional investors that got this stock at $18/share? Or
could I have placed an order through my usual broker?

Also, if the stock is worth $24 after the first day, didn't Tesla just get
screwed out of a whole bunch of capital? Seems like they could have sold the
shares for more (although, I suppose they probably held on to some shares so
they are making some money off of the rise in price, and I'm sure their
employees with equity are happy about it too)

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hristov
These are all very good questions. About how one gets in on the ground floor
-- the IPO is done by an underwriter, which usually an investment bank. Before
the IPO the investment bank sets up sales sessions with a lot of their
friends/big clients, and gets them to promise to buy shares at the initial
offering price. When the IPO happens every one that was initially approached
by the bank and promised to buy shares sends in their money and gets their
shares and then they are free to resell the shares on the open market.

So about how you get onto the ground floor -- you have to be one of those
special people the bank calls. (note that this is the "classic" way things
happen, some IPO's, such as the Google one were different).

There have been some accusations that the underwriters use IPOs to make a lot
of money in addition to their deserved fees. The accusation is that the
underwriting Ibank will sell and IPO to a friendly investor for a very
depressed price, so that the friendly investor is guaranteed to make money
selling the stock as soon as trading opens. To express his thanks, the
friendly investor will then find a way to pay the ibank for its trouble. For
example, the friendly investor can use the ibank as a broker for his stock
trading, even though the ibank has sky high fees. And of course the victim is
the company that does the IPO, which as you said, gets screwed out of a whole
bunch of capital, and even worse they end up with a market capitalisation that
is much higher than the actual capital and assets that they own, so they will
face unfairly high expectation as to their future profits.

This theory was first and best articulated by professor Coffee of Columbia Law
School in an NYT article. So if you are curious you can try to do a search (I
could not find the article myself). Prof. Coffee is a very smart guy and
happened to be my securities law teacher.

The banks of course dispute the theory. The banks' argument is that they need
to place the initial shares to their friends and known clients, and they need
to have the price somewhat depressed in order to sell all the stock of the
offering. Otherwise it would not be certain how much stock they can sell for
what price, so they run a risk of having the offering fail (i.e., not sell all
the offered shares). If an offering fails it is considered a disaster for the
company doing the IPO.

There is however an alternative. It is called a Dutch auction, and in it
potential investors bid for the initial shares in an auction. Thus, the proper
price can be discovered and it is more likely the offering will succeed. Also,
in a Dutch auction much more people can take part in the initial offering.

Google did their offering by dutch auction and it was much easier to get in on
the offering for the Google IPO. You just needed to have a brokerage account
in one of the banks that did the IPO (and this included most major ibanks) and
you could bid for IPO shares. The ibanks were not very happy with Google's
choice to do a dutch auction, but they were Google, so the banks did it
anyways.

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beefman
I don't understand the conspiracy theory. The investment bank will only agree
if kickback > shortfall, and a big investor will only agree if kickback <
shortfall. Obviously I'm missing something. Why can't the investment bank sell
directly on the market in the first place?

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chengas123
It's the company going public that is offering the shares so the IB doesn't
suffer as much if the price is lower. The shortfall is the company's while the
kickback goes to the IB.

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phreeza
Remember the story about what you could have bought if you had invested such
and such amount in apple stock in 2001?

Maybe one day I can buy one of these with the measly investment I made today.
Or maybe my grandchildren.

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Maciek416
It doesn't seem to show a market cap or number of issued shares. Does anyone
here know either of those numbers?

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phreeza
The prospectus talks about floating 100 M$. It is also an interesting read, at
least in parts. Especially the risks section.

[http://www.sec.gov/Archives/edgar/data/1318605/0001193125100...](http://www.sec.gov/Archives/edgar/data/1318605/000119312510017054/ds1.htm)

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stevederico
Does anyone know if they declare the exact day of the IPO adhead of time? I
knew the IPO was this week, but had a hard time figuring out what day for some
reason. Either way I just got in at $24, lets hope this puppy still has some
go in it.

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abyssknight
I got 5 shares as an experiment. I managed to get in on the low end, so
they're doing quite well. Day 2 was looking up early this afternoon, but right
now it's dipping below today's opening (but still up). This was my first stock
purchase, and really more of a "why not?" kind of thing for me. Just wish I'd
had a bit more capital. Probably could have made a small fortune. :)

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Tichy
I don't even know exactly what they are making, except really expensive
electric cars. Are they working on cheaper electric cars, too? What are they
doing that other car makers can't do?

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asdflkj
Yes. Making the Roadster was, according to the founders, a move to compensate
for the "weak" and inferior image electric cars currently have, before they
start making them for mass market.

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mkramlich
somewhat related: am I the only one who would love to see Elon Musk and Dean
Kamen get together, pool their brains and money, and make something like the
Iron Man suit?

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arithmetic
Considering how badly the stock market did today, that's pretty impressive!

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jim_dot
I saw a Tesla roadster in Toronto today.

That's my Tesla IPO Day 1 story.

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eru
Why did they not IPO at a higher price in the first place?

