Tesla Motor Inc.
Essay Preview: Tesla Motor Inc.
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Company Project
Tesla Motor Inc.
Part III.
The last installment of the Tesla project consists of two essay-based questions. Answer the questions in an open-ended format making sure to cite any support research. Do not exceed five pages (double spaced) for your response. This portion is worth a total of 50 points.
Analyze the initial public stock offering that took place at the end of June 2010. Make sure your analysis demonstrates your understanding of the following items: (1) the IPO process in general (2) the price volatility during the initial trading (3) the institutions that are acquiring a stake in the company. 25 pts
Compare Teslas IPO with the 1956 Ford IPO. Make sure your response includes any differences and/or similarities between the IPO of Ford and Tesla. Also, make sure your response discusses why Ford remained a private company for so long and why Tesla did not. 25 pts
(1) the IPO process in general
Tesla is hoping to re-charge its bank account with a $100 million initial public offering. On June 28. 2010 Tesla Motors filed form S-1 with the U.S securities and exchange Commission (SEC), intention to file an initial public offering (IPO) underwritten by Goldman Sachs, Morgan Stanley, J.P. Morgan and Deutsche Bank Securities. It which registered 15,295,000 shares of our common stock, including 1,995,000 shares that the underwriter had the option to purchase. On July 2, 2010, 11,880,600 shares of common stock were sold onour behalf and 3,414,400 shares of common stock were sold on behalf of the selling stockholders, including 1,995,000 shares sold by the selling stockholders upon exercise in full of the underwriters option to purchase additional shares, at an IPO price of $17.00 per share, for an aggregate gross offering price of $201,970,200 to us, and $58,044,800 to the selling stockholders.
The stock opened at $19 a share, already 12 percent above the offer price of $17. It closed the next day at $24, having reached as high as $30.42.
For Dividend policy,
They say “We have never declared or paid cash dividends on our common or convertible preferred stock. We currently do not anticipate paying any cash dividends in the foreseeable future. Any future determination to declare cash dividends will be made at the discretion of our board of
directors, subject to applicable laws and compliance with certain covenants under our loan facility with the United States Department of Energy, which restrict or limit our ability to pay dividends, and will depend on our financial condition, results of operations, capital requirements, general business conditions and other factors that our board of directors may deem relevant.”
(2) The price volatility during the initial trading
Initial public offering was priced at $17.00 per share on June 28, 2010. The following table sets forth, for the time period indicated, the high and low closing sales price of our common stock as reported on The NASDAQ Global Select Market.
(see page 72 of 10-K report)