Tesla’s stock spikes 41% on first day of trading
Over the past few weeks, we’ve heard so much of Tesla beginning to float an IPO and becoming the first automaker since Ford way back in 1956 to do it. Now it looks like it’s paying off. Big time.
On the first day of trading, common stock of Tesla Motors skyrocketed 41 percent on the Nasdaq stock exchange. With shares opening at $17, the number dipped a bit in the opening hours before steadily increasing the rest of the day, topping at $25 at one point before settling in at a closing rate of $23.89.
Needless to say, the overwhelming response and demand for Tesla shares has company CEO Elon Musk grinning from ear to ear. "The response from investors has been tremendous,” he said. “We increased the size of the offering and the demand was still enormous, so we increased the price to a dollar above the top of the range and we still had massive, overwhelming demand.
Continued after the jump
Despite skepticism from companies about the high-cost of electric vehicles and their glaring limitations, the market responded overwhelmingly to the brand with the thought that Tesla would soon become a forerunner in the auto industry as a brand that emphasizes clean technology.
Add that to the proverbial cause-and-effect syndrome that’s typical of the market these days, especially after the day was marked by major stock indexes seeing big declines, including that of Ford Motor Co., which came out of the trading day with significant losses, and you have the perfect recipe for a newcomer like Tesla to come in and take full advantage of the situation.
Whether this translates to a steady increase in shares in the coming days is still a little premature to say, given the unpredictability of the stock market. But that’s a problem for another day for these guys. What’s important for Tesla Motors is that they came out of their first day of public trading smelling like roses.
Source: Detroit News