Did Tesla Get the Benefit of the Doubt?
Three days ago, the announcement that luxury electric-car manufacturer Tesla (NASDAQ:TSLA) planned to cut its sales target for the Model S sedan and issue a follow-on offering of 6.9 million shares drove stock prices down almost 14 percent.
However, when the company priced its latest stock offering at $28.25 per share, less than one percent lower than Thursday’s closing price, shares rose by as much as 4.4 percent, erasing much of Tuesday’s loss. The offering, Tesla’s second follow-on since going public in June 2010, will be underwritten by Goldman Sachs. While the offer remains below the $37.43 average target price analysts have on the stock, its rally shows that investors believe the dilutive impact of the offering will be minimal.
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But Tesla has yet to turn a profit. Ford (NYSE:F), on the other hand, has shown itself to be profitable, and was the first of the Big Three Automaker to do so. In the first half of 2012, Ford earned $2.44 billion, while Tesla saw revenues decrease by 47 percent from 2011 and operating expense increase by 47 percent.
Unlike Tesla, which is currently trying to push back payments on the $465 million loan it received from the U.S. Department of Energy in 2009, or GM (NYSE:GM), of which the federal government still owns 26 percent, Ford has begun paying down its Department of Energy Electric Car Development Loan.
Not only has Ford been profitable, but its 2013 Ford Fusion hybrid may place the company ahead of Toyota (NYSE:TM), the company which has virtually owned the industry, in hybrid technology.