Tesla's Roller Coaster IPO
By Chris on July 9, 2010
Last week, Tesla Motors offered its long rumored IPO and received a mighty reception by raising around $202 million. On the first day of trading, shares closed more than 40 percent above their opening offer price of $16 a share.
However, by market closing on Wednesday, July 7, the honeymoon appeared to be over with shares sliding downward and ending below $15.
We’ve looked at predicting the path of an IPO in a previous post, and the run-up to Tesla’s IPO was so prolonged and publicized that it provides another great opportunity to look at signals over the past 12 months leading up to the offering. Using Recorded Future’s temporal analytics, we can create a timeline view of events related to a Tesla Motors IPO over the last 12 months.
Several spikes in momentum can be seen from September through November of last year as rumors swirled surrounding the companies plans for a near-term IPO offering.
We also notice a sharp rise in momentum at the end of January when mainstream outlets as well as niche automative sources and blogs broadly covered the company’s SEC filing for its IPO. In the excerpted text, issues related to the manufacturer’s near-term revenue are highlighted.
In a look at the three months leading up to the IPO issuance, momentum can be seen building until its culmination at the end of June. Ahead of the June 29 offering, we can see speculation on a deal with Toyota based on the outcome of an overvaluation of Tesla.
The long red bar indicates an event with negative sentiment referenced across several months. This instance is drawn from a Reuters piece that reports, “Only five of the 17 IPOs in the second quarter were trading at or above their IPO prices at the close of markets on Wednesday and the deal flow is still far below historic highs.”
We’ve so far accounted for past trends around the Tesla IPO, its relapse in share value after a meteoric start as well as concerns over the stability of both the company and the general IPO climate. So what does the future hold for Tesla Motors?
We can quickly generate a network looking at relationships to Tesla Motors over the next 12 months where we can identify a variety of interesting connections. We spot an event related to the IPO that warns of a possible production shutdown for its only car the Roadster after 2011. Also evident is the link to Toyota Motor Corporation that was mentioned earlier in the post.
A few thoughts to consider in parting. Will the share price of Tesla begin to show more favorable consistency, and if it doesn’t, how might this affect investment for other electric car start-ups? How will the warning signs about Tesla’s production and revenue play out?
We’ll return to the subject down the line and see what events mentioned here turn out to be valuable indicators.