Tesla Motors, the company we all learned to love for its highly energized electric car, is taking a turn for the worst. Just to perk your memory, the Tesla Roadster Sport has a 0-60 of 3.7 seconds and a range of 240 miles. And it’s 100% electric!
The downside is that on December 27, Tesla’s shares fell 15% to $25.55, the sharpest drop since July 6. But, historically the stock has been unpredictable. Since it’s offering last June, the stock has jumped from a high of $36.42 to a low of $14.98.
Initially, Tesla defied gravity with its blockbuster IPO – a $17 June offering that catapulted 40.5 percent in the first day of trading – a dashing debut on the same date that Nasdaq and S & P had their worst days of the year. At the time, the industry was questioning whether Tesla’s high price would outlast the lock-period. As explanation, Tesla’s selling stockholders, directors, officers and employees are subject to a lock-up period for 180 days after the IPO. The lock-up is done to prevent the stock from flowing too quickly into the market.
In answer to the question of whether the high would survive, apparently it didn’t. When the lock-up expired at the end of December, allowing investors to sell for the first time since the company’s June 28 initial offering, the stock took a dive.
“Other holders may have sold in anticipation of insiders’ sales,” explained Carter Driscoll, senior analyst for clean technologies with Capstone. Capstone Investment’s expectation is that plug-ins and other types of hybrids will continue to outsell electric cars like Tesla.
“A lot of it is the lock-up expiring,” Driscoll said on December 27. “A lot needs to go right to justify the current valuation. They have never mass-produced cars. They start paying back government loans in 2012.”
The Department of Energy loaned Tesla $465 million in March, a portion of which goes towards developing its second electric car, the Model S sedan due in 2012. Panasonic, one of the world’s largest manufacturer’s of rechargeable batteries, made a $30-million investment in November.
Toyota and Daimler have each invested around $50 million. But, Tesla CEO Elon Musk remains the company’s biggest shareholder.
Driscoll said he doesn’t expect Tesla to report a profit or positive earnings before interest, taxes, depreciation and amortization until 2013. His long-term price estimate is $22 a share.
As of this writing –December 30, 2010; 12:12 PM EST–it looks like Tesla could be in the game again. The last tick was 26.94.