Tesla IPO Appears Threatened by CEO, Production Problems
There seems to be some trouble ahead for anyone who was hoping to invest in Tesla Motors after their impending IPO. After filing the necessary paperwork for their initial public offering (with which they hope to raise $100 million to pour into their gapingly empty coffers) some concerning information has arisen regarding the company and its CEO, Elon Musk. Apparently, Musk "spends significant time with Tesla and is highly active in our management, [but] he does not devote his full time and attention to Tesla." This would be a problem for most companies, let alone a company that is trying to be the forerunner in an industry that is not yet fully established (i.e. that of the electric performance car). But there are a few interesting tidbits that make this even more disturbing news.
First off is the fact that Tesla just received a $465 million loan from the U.S. government (read: taxpayers pockets). You'd hope that a sum of that size would have the full attention of the CEO of the company spending it. Next is the fact that starting at the beginning of next year, Tesla will no longer be selling, well, anything. English auto company Lotus supplies Tesla with many of the parts they need to build their signature Roadster from a certain factory in Hethel, England. This factory is being retooled to build other parts for Lotus vehicles, basically leaving Tesla without a supplier for crucial Roadster parts until 2013 (at the earliest). Third, Tesla will not start production of its Model S family sedan until 2012. This is especially significant since the Model S will carry a much easier-to-swallow $50,000 price tag. Add to that the fact that the company has lost $236 million to date, and that they "expect significant increases in [their] costs and expenses to result in continuing losses for at least the foreseeable future" and you can start to imagine how potential (and current) investors might feel about the future of Tesla Motors.
Sources: Daily Finance via Engadget, Wired
