Tesla became the first American car company to go public since Ford in 1956, but more importantly, the electric car maker raised some much-needed cash -- $226 million.
Initially, Tesla planned on offering 11.1 million shares at $14-$16 each, but later increased that figure to 13.3 million. According to Bloomberg data and a filing with the U.S. Securities and Exchange Commission, Tesla also increased the share price to $17 each. In total, the company raised $226 million in its initial public offering. The company will trade under the symbol TSLA, and CEO Elon Musk will ceremonially ring the NASDAQ Stock Market opening bell today.
Going public may seem like a good way for several Tesla affiliates, as well as Musk -- who has reportedly gone broke after spending more than $70 million of his own money -- to recoup their losses. The federal government, however, has put a few measures in place with its loan to ensure that Musk, along with a few other key players, remain Tesla investors. In order for Tesla to secure the loan, Musk and other certain unnamed Tesla affiliates must retain 65 percent of their stock in Tesla for at least one year after completing the Model S project.
The cash infusion from the IPO comes at a good time for the company, which has yet to turn a profit after seven years. Tesla will use the funds from its IPO along with a $465 million federal loan to buy a factory in which to produce the Model S sedan and start production. Toyota and Tesla have already been in talks about reopening the now abandoned New United Motor Manufacturing Incorporated plant in Fremont, Calif.
As part of the deal to reopen NUMMI, both Tesla and Toyota would produce an electric vehicle there in 2012. Tesla’s plan: a production version of the Model S, as well as possible Model S derivatives and a new Roadster. Toyota’s EV plans for NUMMI, however, remain less clear. In addition to reopening the NUMMI plant together, Tesla and Toyota also came to a deal in which the Japanese giant invested $50 million in the American startup and would later be granted common stock. Following the IPO, Toyota now owns roughly 2 percent of Tesla.