The wild ride of Tesla Motors

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Tesla Motors ( TSLA ) was perhaps the most-anticipated initial public offering of the last few years, certainly of the new decade. In the three weeks after shares began selling on June 29, Tesla's investors might be forgiven for thinking that they had stepped into a ride in one of the company's lightning-quick, tight-handling cars.

Tesla's IPO valued the shares at $17 per share, but in the first two days of trading the company's stocks soared to nearly $24. Despite managing only a single profitable quarter in its history, investors initially found the company's high flying, well-publicized ambition irresistible. Those first few days had the feeling of the tech bubble's glory days, when speculative ventures with no business plans, cash flow or long-term goals could pull in $100 million in an offering.

The new car exuberance faded after a few days, though, and skepticism set in. Tesla's share price tumbled to $15.80, below the IPO level. Then it staged another recovery, climbing its way back up to $22 per share, before slipping again.

So what's the future for Tesla? It's going to depend largely on the Tesla Model S, which is the codename for a lower-priced, consumer sedan being developed by Elon Musk and his company. Orders have already been placed, although the car won't hit roads until 2012.

Big investments from Toyota and an agreement to jointly develop an electric version of the RAV4 mid-size sport utility vehicle may help tide the California-based startup over until it can start selling its cars in earnest.

In the meantime, investors might see one of Tesla's performance Roadsters cruising - quietly and cleanly - down the freeway.

If they're lucky, that is - only 1,200 have been built. ADNFCR-1724-ID-19901743-ADNFCR




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Personal Finance , Technology

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