Tesla IPO Building Momentum

Tesla is two weeks into its roadshow, and due to come out today. It is increasing the size of the float from 11m shares to 13m shares, a very positive sign. At this point in the process, the underwriters are getting feedback from institutions and building an opening day book of orders.  

Given the interest, the stock would be expected to sell at the high end or even above the range of $14-16/share. Indeed, it got priced Monday night at $17, valuing the company at $1.6B, a bit lower than a research estimate last week at $1.85B, or $20/share. The buzz last week was also generally positive. The last minute (unsigned) deal with Toyota also boosted interest.

There is a strategy to these sorts of IPOs to buy the dip six months after offering. Last Sept a much-hyped green IPO, A123, popped 50% on the first day ($29) but has since dropped below the offering ($13.50) to under $10. It has now come out of the 180 day lockup, where insiders begin selling and further depress the price. When that selling abates, the stock typically becomes a buy - especially in this case if Tesla does well, since A123 supplies batteries for electric cars.

A successful offering could strengthen the tech IPO market, which has gotten despairingly weak recently. Given the bellweather status of the first electric car startup going public, a successful offering could also bolster a whole slate of green offerings, such as Smith Electric, an electric truck startup that also wants to go out, and Fisker, the closest venture-back competitor to Tesla. It might also have a halo effect on solar IPOs, which were hot three years ago and have been downright chilly recently. eSolar may be the next solar IPO to test the window. 

Comments

[Hockthefarm]

A Brief History of the United States (1980-present):

http://prudentbear.com/index.php/featuredcommentaryview?art_id=10399

Hock

[Micky D]

Just triple checked the charts. The Great Triple Three of Three with Three cherries on top is here.

I thought it was here 3 weeks ago, but it extended to the power of 3 and that projects to tomorrow 6/30 (6 divided by 2 is 3! and 30 divided by 10 is 3!) at 3:33. Simply amazing how the math works!

Get ready for crash mode. This will be the Grand Super Triple crash (only happens every 333 years, but it is here now).

Seriously, this is the big one(my charts told me the same thing in Aug 09, Sept 09 & Oct 09, oh and Feb 10). Somehow though I missed the May crash, it wasn't a crested nested set of 1s and 2s and 2s and 1s.

So get ready! If this doesn't work out, 7/3 is projecting to be big, oh wait that is a Saturday.

May the short be with you!

[DG]

VB,

This is my current analysis.

We could still decline more, but not too much more and any rally would have to be at least somewhat robust in order to maintain this perspective.

http://img706.imageshack.us/img706/9705/spxdailyjune10.png

I think it's too early to start talking about a 3rd wave of any wave-(C) of a Flat. Even if that count is right and the wave-(C) is underway, it needs to last at least as long at wave-(A) and more likely will be t(wave-(A) + wave-(B))/2, which means it'll go until nearly the end of 2011.

http://yfrog.com/jmspxdailyjune10p

[DG]

Where do you expect TZA to retrace to, under those conditions?

The longer term moves of these leveraged inverse ETF's are difficult to gauge.

You said it.

ns

I would think the open gap at 60-65 would be filled.

Roger D.

On TZA? No way in hell. The thing bottomed around 5.5 in April. To go to 60-65 would be a ~1100% return, which would require a ~300%+ decline in the IWM. Even given that compounding would work in your favor during a bear market, the math just doesn't work to get back to 60. When you consider that it took an over 100% return on the IWM to get the TNA 3X Bull ETF to go up 600%, there's no way the 3X Bear ETF will go up over 1100%.

Every day you find some new way to demonstrate your cluelessness, that's for sure. You are the embodiment of the saying, "Nothing is ever idiot-proof, because the universe will just create a bigger idiot". Wow.

[Roger D.]

DG,

Hide and watch asshole.

Roger D.

[Account Deleted]

DG !!

Thanx for your perspective on SNP.Even based on the view u gave me after a brief E leg we are headed straight down and could be quite a ferocious fall.Wht do u have to say about it ?

Wht is the larger structure that u r looking at or is it still that the count is still evolving.

Regards
VB