In what was, significantly, the first initial public stock offering from any U.S. automaker since 1956 when Ford went public, Tesla today managed to sell 13.3 million shares at $17 a share. Even more significantly, as of the time of this writing (around 2:30 PM New York time), Tesla's stock has been climbing steadily all day and now sits above $20 per share and rising.
Tesla, makers of the $109,000 Roadster plug-in supercar, has yet to turn a profit in its short three year history. By all accounts, Tesla will be burning even more cash as it tries to get its upcoming Model S $50K luxury "family sedan" out the door by 2012 and will remain unprofitable for the next two years in doing so. Yet, it appears Tesla has struck a chord with investors who see the potential in electric cars.
Defending his company's lack of profitability to this point—and conducting an IPO in the face of those losses—Elon Musk, Tesla CEO, said the company would already be profitable if it was only making the Roadster and selling electric drivetrains to other companies, adding “It’s just not possible for the company as a whole to be profitable with that rate of expansion."
In any case, the lack of profitability to this point seems to be a non-issue for early investors.
Update: Tesla closed their first day of trading at a value of $23.89 per share, a gain of $6.89 or 40.53%. After hours trading has brought the stock even higher, to $24.20 per share as of 4:51 PM New York time.
A growing company will not show a profit since they invest everything back into growth.
Tesla has promised to not stop with their expensive Ferrari killer and move on to challenge the BMW, and then the Corolla. So far, they seem to be doing this.
It will be interesting to see if those who are buying their stock are buying it for short-term gain or for sustainable growth. Given their market in sustainable transportation, either seems possible.
Go Tesla!