NEW YORK, July 6 (Reuters) - Shares of Tesla Motors dipped below their initial public offering price of $17 for the first time on Tuesday after risk-averse investors sold shares across the board, sapping the juice from the electric car manufacturer's IPO.
Tesla Motors, which is not expected to turn a profit for the next eight quarters, boomed just after its debut but has since pulled back.
'It's going to continue to be a volatile story for a little while,' said Matt Pherian, an analyst with Renaissance Capital in Greenwich, Conn.
The stock's decline mirrors the market's struggles of late. The Nasdaq Composite has fallen 5.7 percent since June 28, the day before Tesla Motors made its debut, and the Standard and Poor's 500 index has also fallen 4.3 percent.
'When you're looking at a company that's not going to
turn profitable until 2012, you have a wider valuation band - the volatility and trading particularly reflects that,' Pherian said.
Tesla Motors expects losses until at least 2012, when it begins production and sale of the Model S Sedan. Since its inception, the company has lost money annually, according to its Form S-1 filing.
'Vision alone will not carry them, (CEO Elon Musk) has got to generate a profit to get some interest on his side,' said Francis Gaskins, president of IPODesktop.com in California, an IPO research firm.
Shares of Tesla Motors ended their first day of trading up nearly 41 percent to $23.89. They hit an all-time high of $30.42 on June 30, the company's second day as a public company.
Tesla Motors markets the Tesla Roadster, a fully-electric powered luxury sports car. Since the company was founded, it has manufactured and sold nearly 1,000 units of its Roadster Model. The Model S Sedan is expected to be priced around $50,000, including a federal tax credit.
(Reporting by Matthew Lynley; Editing by Andrew Hay)
((New York Treasury Desk 1-646-223-6000) Keywords: TESLA/HOTSTOCK
COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Tesla Motors, which is not expected to turn a profit for the next eight quarters, boomed just after its debut but has since pulled back.
'It's going to continue to be a volatile story for a little while,' said Matt Pherian, an analyst with Renaissance Capital in Greenwich, Conn.
The stock's decline mirrors the market's struggles of late. The Nasdaq Composite has fallen 5.7 percent since June 28, the day before Tesla Motors made its debut, and the Standard and Poor's 500 index has also fallen 4.3 percent.
'When you're looking at a company that's not going to
turn profitable until 2012, you have a wider valuation band - the volatility and trading particularly reflects that,' Pherian said.
Tesla Motors expects losses until at least 2012, when it begins production and sale of the Model S Sedan. Since its inception, the company has lost money annually, according to its Form S-1 filing.
'Vision alone will not carry them, (CEO Elon Musk) has got to generate a profit to get some interest on his side,' said Francis Gaskins, president of IPODesktop.com in California, an IPO research firm.
Shares of Tesla Motors ended their first day of trading up nearly 41 percent to $23.89. They hit an all-time high of $30.42 on June 30, the company's second day as a public company.
Tesla Motors markets the Tesla Roadster, a fully-electric powered luxury sports car. Since the company was founded, it has manufactured and sold nearly 1,000 units of its Roadster Model. The Model S Sedan is expected to be priced around $50,000, including a federal tax credit.
(Reporting by Matthew Lynley; Editing by Andrew Hay)
((New York Treasury Desk 1-646-223-6000) Keywords: TESLA/HOTSTOCK
COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.