Pushing the Wet Noodle on IPOs

As we await the seminal Tesla IPO (TSLA), the IPO market continues to disappoint. Last week's two tech IPOs, Motricity (MOTR) and Broadsoft (BSFT), both lowered their trading ranges then priced at the low end, and are currently 6-7% below even that. Solyndra, the solar startup that was visited by President Obama last month, canceled its IPO. Nat Goldhaber, a cleantech venture capitalist, remains bullish on cleantech IPOs but not on the solar sector, noting that Europe as been a center for solar and its austerity plans have dampened the solar industry. 

 

TechCrunch ran an assessment of IPOs and how the poor IPO market has impacted the leading companies. Their chart shows how meager the first day pop has been, and how the companies have tended to do poorly in the after-market. As a consequence, the leaders of this generation of new ventures - Facebook, Zynga, LinkedIn, Twitter, Skype - have so far eschewed the IPO and relied on generating cash flow and private investment to grow. Many of the later round investors are allowing the early founders and employees to partially cash out. 

It may be that we need a signature IPO - like Netscape in 1995 or Apple in 1980 - to spur the return of the IPO market. Many of the tech IPOs so far are not in that league, and instead fall into two categories: 

• late 1990s vintage startups whose investors are seeking liquidity after a long slog, and
• dashing cleantech ventures who need oil-tanker-loads of capital to build out at scale

Maybe Tesla can restart the IPO market, at least for cleantech deals. Even green-industry stock analysts are skeptical. It is a bit daunting to imagine a new company taking on the huge scale players in autos, many of which are already into electric vehicles, especially Honda and Toyota. Yet it is conceivable. Here is why:

• The last successful auto startup in the US was Chrysler in 1925. Chrysler got out when it was possible to launch against the scale of the leaders - it marked the transition away from innovation to scale economics
• There have been a number of other car startups between Chrysler and Tesla, but none with the game-changing potential of Tesla
• It seems inevitable that we transition the fleet to electrics. It will take several decades. Tesla marks the first startup of this transition
• Tesla may also mark the beginnings of a restructuring of the auto value chain, to become less vertically integrated and more like the consumer electronics industry, and to iterate models more quickly. If so, the scale advantage of the leaders will be turned into a cost disadvantage

Tesla is the bet on the future of cars, not the past. Electrics represent a generational disruption to the auto industry, and usually out of these periods new winners emerge. A discussion of their pitch is here, and you can see the roadshow presentation here. Key slide: building a platform, not just a car:

 

Disclosure: I have a small indirect interest in Tesla. 

Comments

[Bird]

I'm not gonna beg you Mamma.

[usdollar]

Here is where we are at my map from 2007. ABC X (irregular flat) A down B up (right shoulder). v of i of 1 of C. I believe we will go upp in ii from here (until Friday or early Monday). i might not be done yet?

[Mamma Boom Boom]

Bird, that's a pretty cute story, but I wouldn't rely on it too many times.

Ok, I'll give you a quicky. I use some EW and several non standard tools. An older fellow, who was a friend, gave me a study one time. It turned on a light bulb. I've devised tools around that study.

There. Don't beg!

[Steven_737]

Long NQ 1851 3 cars

[Bird]

Mamma, agree. And like the be-atch I like to think you are, you have given it away and still have it!

[Steven_737]

stop 1847

[Steven_737]

paper trade testing counter - trend entry
E.W. based

[Steven_737]

bummer

[Roger D.]

How do all you bulls feel today? DG I think you don't know impulse from shinola, same goes for JT. I post two very simple wave counts with clear patterns and I get blasted. No I won't say KSMFA this time.

Roger D.

[Roger D.]

For all you Bulls and Elliot wanna be's, I would study this chart,it is anything but bullish, in fact given this pattern is in the GS position, I would not want to be long here at this moment in time.

Roger D.

http://www.screencast.com/users/parisgnome/folders/Default/media/2a500242-acd2-485c-9b43-cc664783c2e0

[DG]

I post two very simple wave counts with clear patterns and I get blasted.

Yeah, clearly wrong.

Like I said Roger, you don't know what you don't know. Your cluelessness regarding E-wave is nearly infinite.

You want to know how I identify Impulse waves? Read Chapter 5 of Mastering Elliott Wave, especially the Essential Construction Rules on page 5-2. Then, tell me where those rules are wrong and why your haphazard and subjective BS labeling is right. If a pattern doesn't meet those rules, it's NOT and Impulse. Period.

Oh, and for your information, I have been short most of the week and making money. I have posted in exact detail all of the trades I've made on my blog. Let's see you do the same before you talk smack, eh?

[DG]

For all you Bulls and Elliot wanna be's, I would study this chart,

For someone who claims to have all this Elliott Wave that you do, you'd think you'd know that the end of a "V" can't be labeled ABCDE and that the wave-E of a Triangle can't be larger than wave-D.

See, your charts only take a second to debunk as worthless crap.

[DG]

that the wave-E of a Triangle can't be larger than wave-D.

Unless it's an Expanding Triangle, of course. Which your "triangle" clearly isn't.

This is the major leagues, Roger. Your mommy may be impressed with your pretty charts, but no one else is.

[Roger D.]

DG, you know less about EWT than I thought,your back to being a ignorant fucking asshole!

RD

[DG]

DG, you know less about EWT than I thought,your back to being a ignorant fucking asshole!

What, specifically, don't I know about EWT?

Be specific, not some general bullshit, like you typically post. Have you ever even read Mastering Elliott Wave? Hell, have you ever read anything on Elliott Wave other than some online tutorial? Seriously, a month after I started using Elliott Wave, I already clearly knew more about how to label charts than you know after claiming to have been using it for decades.

Again, mommy may think you're so such a good little Elliott Waver, but I don't.

[Bird]

You two are reminding me of my kids.

[DG]

Bird,

Eh, maybe, but the larger point is that when people say "Elliott Wave is too subjective", it's people like Roger they are talking about. He could have cut & paste every post of his from today from his posts 6 months ago. They all say the same thing.

Again, all I ask is one simple thing: Tell me why Neely's rules for Impulse wave identification are wrong and what should replace them. If you can't do that, then don't label anything that doesn't fit the rules as an Impulse. Or, go ahead and label it as an Impulse but prepare to be wrong.

I wish someone had been able to convince me NOT to let my pre-conceived notions of what the market SHOULD be doing drive my Elliott Wave counts when I first started trading with it. Woulda saved me a few bucks.

[Pervy]

Hey Mamma;

Can you give me a quicky like you gave Bird? It doesn't matter if you are 600 lbs, I'm a glutton for pain.

[philippine fred]

roger cant have any chips in the game as he wouldnt have the energy to put something on here continually losing like he does.

buying corn today if it pops upwards if anyones interested.

[Mamma's Beotch]

>Mamma, would you summarize the tools you use to make your calls?<

He won't even tell us what trading platform or data-feed he uses, so why would you even think that he would share a summary of his trading methodology?

I'll give you a hint.
He's a wanna-bee trader that does nothing but "paper-trade".

[lacoste shirts]

Expreience keeps a dear school, yet fools will learn in no other. Do you understand?