Tesla stock falls 15% after post-IPO lock-up ends
Shares tumbled $4.54 to $25.55 on the first trading day after Christmas, when a restriction on certain stock sales imposed after the company's June initial public offering lifted.
The Palo Alto firm's shares started at $17 and had doubled by late November. And to some extent, the company saw Monday's exodus coming, warning about the sell-off in a Securities and Exchange Commission filing last month.
Tesla began glamorously, with film stars such as Matt Damon shelling out more than $100,000 for the Roadster, the company's first vehicle. Chief Executive Elon Musk has also been a glittering figure, co-founding PayPal and heading up Hawthorne aerospace company SpaceX.
However, despite being founded in 2003, Tesla has yet to turn a profit and doesn't plan to start until 2012 at the earliest. That's when the automaker hopes to start selling its Model S sedan for about half the cost of a Roadster.
But that still leaves Tesla in a shaky position, as cheaper electrics and hybrids such as the Nissan Leaf and the Chevrolet Volt get a head start by rolling onto the market this year.
“The biggest problem facing Tesla is that every automaker is now seriously looking into electric vehicles on some level, and this provides competition from far more established and far better funded organizations," Karl Brauer, senior analyst with Edmunds.com, said in a statement.
There's also the $465-million loan Tesla took out from the federal government this spring to develop the Model S. The hurdles, Brauer said, could render the company "irrelevant in a relatively short time frame."
-- Tiffany Hsu
Photo: The Tesla Model S sedan electric car is displayed at the North American International Auto Show at the Cobo Center in Detroit in January. Credit: Kathleen Galligan / Detroit Free Press / MCT