Tesla Prices IPO At $17 Per Share | Hacker News Reader

Tesla Prices IPO At $17 Per Share

techcrunch.com

19 pointstransburgh14 comments

The market cap is much more instructive to have in the title - price per share by itself carries no information.

It does if you're trying to figure out how many shares you can buy. It's also of note because $17 is higher than the planned $14-16 range.

Number of shares I can buy carries no information. Percentage of the company that I can own for x dollars carries some information.

Although if you already knew about the earlier plans you mention, than the new 17$ per share is news. (I was not that informed.)

I agree with you mostly, but price per share does carry some information. You don't think there would be any difference if the price per share were $0.00001 as opposed to $1,000,000 - even if the market cap were the same? There is a subtle difference because the price is determined by the buying and selling of the shares - and different types of people would be buying and selling the shares at these prices.

Much as I like the Roadster, I'm extremely pessimistic about Tesla's chances. Established auto companies with much deeper pockets would have trouble bringing the Model S to market. Tesla hasn't been very successful selling the Roadster, a car whose $100k price tag ensures it's selling to a demographic that doesn't care about service, warranty, or battery-replacement costs. The Model S will be an order of magnitude more difficult to sell, even assuming they meet their own overly-optimistic development schedule.

Seems like a good time to try their luck though. Demand for non-petroleum powered cars is building, nobody is established as a manufacturer and it seems the technology is now up to the job. It's still a gamble, but the odds seem a bit better than usual.

I've seen too much news trying to spin the "Tesla raises $221MM" as a huge number. Sure, for most of us that hack away on web apps, $221 million is insanely high, but it's important to remember that Tesla's operating at a loss of nearly half a billion right now and is still losing money. The S is necessary to turn the cash flow around.

$1.5 Billion Market Cap. Will be interesting to see where it is in a week.

I don't really get why anybody plans any IPO prices. Shouldn't auctions be the best tool for the current owners to get as much money as they can?

They actually are auctions, just not public ones. Silent auctions, where the bidders communicate privately with the seller.

The buyers set a price they will pay, possibly a price x number of shares matrix.

Then the company picks a price to maximize the amount brought in.

Yes, more or less. But you often see shares go up by quote a lot on their first day. That should not happen.

But why did the share price then go up on the first day after the IPO? (And why does it tend to do this for a lot of companies?)

Massive competition from many established companies, $300M+ tooling costs to roll out a new car, low profit margins, high marketing costs, long sales cycles, etc... Auto manufactuing is a bad business to be in, maybe second only to operating airlines. And Tesla owns no special ip on their battery tech, they will likely have to do a lot of dilution in the future to stay alive. That said, I wish them luck, and if anyone can do it, it's Elon Musk.

I really like Tesla (the company) but I would avoid Tesla (the stock). You're buying an awful lot of risk for that price. In fact I would be surprised if there weren't already significant amount of short sellers interested in this.

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