Tesla Motors raises $226mn as it completes IPO

2010 Tesla Motors Roaster

Update: The Tesla IPO proved to be a hot one, with the stock (NASDAQ:TSLA) rallying up to close 40.53-percent above its debuting price of $18.61 to $23.89 per share, topping out with a ceiling of $24.76 in intraday trading.

The California-based electric carmaker, Tesla Motors, has raised $226.1-million in capital, according to a SEC filing, following an initial public offering.

The company confirmed it took 13.3-million shares at $17 per share to raise the total amount of capital that will be used by the company to finance operations, production, and future acquisitions.

Tesla Motors did not disclose information relating to which firms the company could acquire in the future.

The initial stock price could be construed as high given the company has never produced any free cash flows in its history since the company was founded in 2003.

 Tesla is believed to have made available the equity issue to the participating underwriters anywhere between $13 per share to marginally under $17.

Underwriters include numerous U.S. investment banking institutions, including New York City-based Goldman Sachs, and JPMorgan Chase, and Morgan Stanley, among other financial intermediaries.

The top carmaker in the world, Toyota, announced it would invest $50-million in the company once it went public, and it would form a partnership with Tesla to develop electric engine vehicles.

Tesla Motors co-founder and chief executive said in a statement, “It is an honor and a powerful endorsement of our technology that Toyota would choose to invest in and partner with Tesla,”

Tesla is now on track to release its new Model S sedan, capable of traveling up to 300-miles before it needs a charge, and acceleration from 0 to 60mph in only 5.6 seconds.

Tesla’s fastest vehicle is the Roadster Sport, reaching 60mph in only 3.7 seconds.

Tesla has already received over $460-million in special loans from the U.S. Department of Energy as part of a program from the government that is designed to lessen U.S. dependence on foreign energy, particularly oil.

Tesla says it is not expecting a profit at least over the next couple of fiscals as the company will incur significant charges related to operations and production.

The company will begin trading tomorrow on the NASDAQ index under the ticker TSLA.

The company profile is already available in Google Finance, although very little information is available as trading has not commenced.

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Hercules holds a B.Comm Finance from Ryerson University in Toronto, Canada. He is a Chartered Financial Analyst (CFA) level 3 candidate. He was previously a contributor at FiLife, a finance website owned by Dow Jones and IAC. Write to [email protected]
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