http://www.marketwatch.com/...llion-ipo-2010-06-28SAN FRANCISCO (MarketWatch) -- As Tesla Motors, the Silicon Valley-based maker of sleek, high-performance electric cars, steers its highly anticipated public stock offering toward a Tuesday debut, hopes are running high that the company can plug into a rich vein of ready cash stretching from the Bay Area all the way to Wall Street.
Tesla, whose top-end Roadster model sells for more than $100,000, was founded in 2003 by Chief Executive Officer Elon Musk and Chief Technical Officer J.B. Straubel. It has yet to turn a profit.
Nonetheless, the stock is likely to attract a cult following, said Scott Sweet, senior managing partner of IPO Boutique.
At a time when Detroit stalwart GM is also gearing for a return to the public markets, the unconventional Tesla is becoming the first American car maker to go public since Ford Motor Co. first brought its shares to the New York Stock Exchange in 1956. Tesla is focusing on its clean-energy technology as a selling point for its company, hoping to tap into growing consumer interest for hybrid vehicles in an era of higher oil prices.
And Sweet said there is, in fact, strong demand for Tesla shares. He said the Tesla IPO is "multiple times oversubscribed" at the retail and institutional levels, which suggests the deal could be priced at the high end of the planned $14-to-$16-a-share range.
On Monday, Tesla boosted the number of shares it plans to offer in the deal by 20% to 13.3 million shares, of which insider holdings will constitute 1.4 million shares. In all, the deal could raise $244 million. Sweet surmises the stock could pop by 10% to 15% over the offer price in first-day trading.
Tesla will trade on the Nasdaq under the ticker symbol "TSLA." Handling the offering are Goldman Sachs Group Inc.
Immediately after the IPO, Tesla plans to sell $50 million in shares to Toyota Motor Corp. The electric-car maker recently agreed to buy Toyota's Fremont, Calif., manufacturing facility for $42 million. That deal included an investment from the Japanese company as part of a broader partnership between the pair.
Musk, 38, founded Tesla after helping launch PayPal, an electronic-payment system acquired by eBay Inc. in 2002, and Zip2 Corp., a provider of Internet enterprise software acquired by Compaq in 1999. He is expected to own 28% of Tesla's stock after the IPO.
Sales of the Tesla Roadster began in 2008, followed up last year with the Roadster 2. As of March 31, Tesla had sold 1,063 Roadsters to customers in 22 countries and had unfilled reservations for a further 110.
In recent years, there has been a shift in the IPO market to companies showing actual profits -- versus mere potential -- before selling shares to the public. But Tesla does not expect to make a quarterly profit until at least 2012. Through March 31, the company's net loss since inception approaches $300 million. It has generated $147.6 million in revenue over the past five years.
In its prospectus, Tesla said future profit hinges on sales of its $50,000 Model S sedan. Volume production of that five-passenger vehicle is to begin in 2012. So far, 2,200 potential customers have plunked down a $5,000 minimum refundable down payment for the Model S, which was first marketed in March.
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Tesla logo outside a showroom in Chicago.
Also in the works is a vehicle to be sold at a lower list price and produced in higher quantities than the Model S, according to Tesla. But production of that model remains several years off.
In addition, Tesla is currently supplying 1,500 battery packs and chargers to Daimler AG, which is using the technology in its Smart fortwo, a downscaled vehicle sold in Europe.
Palo Alto, Calif.-based Tesla, which has 646 employees, owns 12 stores in the United States and Europe. It hopes to build a network of 50 stores worldwide. Besides venture capital, Tesla has been getting help from the U.S. government in the form of a $465 million Energy Department loan. It had exhausted $45 million of that loan as of June 14.
Market appetite for Tesla's IPO could serve as something of a litmus test for a coming stock offering by Zipcar, the world's biggest car-sharing service. Cambridge, Mass.-Zipcar filed June 1 for a $75 million IPO.
Time for a vacation 
