Tesla Motors Banks On IPO Raising Capital
MARY LOUISE KELLY, host:
A California company with one of the few fully electric cars on the road today is turning to the stock market for more cash.
Today, Tesla is selling shares to the public. The company, known for a $100,000 electric sports car, has never made a profit. It's hoping to raise about $200 million of investor money from today's stock market offering.
NPR's Andrea Hsu has more.
ANDREA HSU: Earlier this year, Tesla's CEO Elon Musk acknowledged that he'd run out of cash. In divorce papers filed in court, he said he's living off loans from friends. It was quite a revelation from the cofounder of PayPal, who's also dabbled in space travel and is the inspiration for a Hollywood movie. Now Musk is turning to investors for the cash Tesla needs to build its next car, the Model S sedan.
Jeremy Anwyl of the auto information website Edmunds.com says Tesla's really captured people's imagination.
Mr. JEREMY ANWYL (CEO, Edmunds.com): It reminds me of the early days of the car industry, where there'd be early pioneers building cars, where these colorful entrepreneurs defied the odds. And that's sort of the story here, as well.
HSU: Among Tesla's backers are the Department of Energy, which has given the automaker a $465 million low-interest loan, and Toyota, which has promised to buy $50 million worth of shares. In turn, Tesla will purchase a defunct Toyota plant in Northern California.
Independent auto analyst Maryann Keller questions the wisdom of investing in Tesla, since it's never made any money.
Ms. MARYANN KELLER (Independent Auto Analyst and Author): I don't know how this stock performs after an IPO. To me, it seems like an extraordinarily risky investment.
HSU: She notes that Tesla will lose its only source of revenue when it ends production of the Roadster next year.
Andrea Hsu, NPR News.
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