Amid worldwide marketplace and economic uncertainty, Tesla debuted its stock in June 2010 on the NASDAQ Stock Market (Ticker Symbol: TSLA). The stock price jumped over 40 percent in its first day of trading to close at $23.89 in an upsized deal that valued the firm at $2 billion and increased above $226 million.
It was first IPO offered by an American automaker ever since Ford’s introduction in 1956. The secondary market was much less sure while the primary market revealed strong excitement for the stock. Issues were raised about the long term utility of the firm originating from a restricted operating history, a long history of losses, liquidity issues, unreliable consumer demand, high-priced battery technology and competition from conventional automakers. Because of this, the stock was frequently the subject of high short interest, a predictor of lower investment performance. The question harassing investors was: were the short- correct in their own bearish thought, or was a short squeeze at hand? This case describes the road of Tesla from founding to outsourced manufacturing of the Roadster, the first completely electric sports car, to in house capacity creation of the Model S, its highly regarded entirely electric luxury sedan. Specifically, it focuses on the long-term utility of the increase company alongside questions related to quality of earnings.
Tesla - Evaluating a Growth Company case study solution
PUBLICATION DATE: May 17, 2013 PRODUCT #: A209-PDF-ENG
This is just an excerpt. This case is about FINANCE & ACCOUNTING
