NEW YORK - Shares of electric vehicle maker Tesla Motors Inc. on June 29 opened nearly 12 percent above their initial public offering price, Reuters reported. The shares were still up 10 percent in afternoon trading.
This is the first initial public offering by an American automaker since Ford's debut in 1956.
With an issue of 11.88 million shares, Tesla's IPO raised $202 million. CEO Elon Musk parted with more than 900,000 privately owned shares, taking in $15.3 million on the day. An additional 500,000 privately held shares were sold, MarketWatch reported.
Late Monday, Tesla priced its shares at $17 each -- above the target range of $14 to $16. When shares hit the open market Tuesday, they rose higher. Tesla's first trade on Nasdaq was for $19 a share. The stock quickly fell back to below $18 to start the day, but climbed up to above $20 with an hour and a half left in trading, CNNMoney.com reported.
Analysts predict the shares will be volatile in the near term. The company, headquartered in Palo Alto, Calif., does not expect to be profitable for at least two years.
According to CNNMoney, the seven-year-old EV maker lost $55.7 million last year and has lost $260.7 million since its inception. But Tesla is due to launch its Model S electric sedan in 2013 -- a much more affordably priced EV than its Roadster sports car. The base price for the Model S will be $49,900 including a federal tax credit. With an optional extended-range battery pack, the Model S will travel over 300 miles per charge.
Tesla has purchased the former NUMMI factory in Fremont, Calif., to manufacture the Model S sedan and future Tesla vehicles. As recently as April of this year, the NUMMI factory was used by Toyota to produce the Corolla and Tacoma.