UPDATE: "Tesla: Power Failure! Electric Car Maker Drops Below IPO Price"
Tech Trader Daily's Eric Savitz is having fun with punctuation.
When he posted "Tesla Mania! Shares Skyrocket On First Day Of Public Trading" I commented:
The next day he fired back with:
Tesla Mania! Day Two!
Yes he actually said that. Five days before the IPO.
We thought we should highlight this part of the story:
God help the investors. Oh wait:From BusinessWeek:
...electric vehicles have real cachet with consumers, which positions Tesla well for an enthusiastic reception with retail investors....
Tesla Motors Inc., the first U.S. automaker to complete an initial public offering in more than a half century, retreated for a fourth straight day to fall below its IPO price of $17 a share. The maker of the $109,000 electric Roadster bought by Brad Pitt and George Clooney slid 13 percent to $16.75 at 3:04 p.m. New York time in Nasdaq Stock Market trading....MOREHere's ZeroHedge's comment:
Irrational exuberance or Rational idiocy?
To Be Fair:Here's Forbes' 2004 story on Google's failed IPO:
Google's Flub, Flop And Bomb
Google's IPO didn't accomplish what it set out to do: democratize the new issues market and smooth out manic first-day trading.
Google's (nasdaq: GOOG - news - people ) IPO opened Aug. 19. It now seems like ancient history, but the deal provides a chance to see what's ahead for the IPO market: The Dutch Auction, which is intended to ensure the distribution of shares to investors whose bids are at or above the price that clears all shares in the deal, won't become the industry standard.
"In reality, the prospectus permitted Google to decide at its own whim how to set the price, allocate the shares and which investors are worthy of being allowed in the process," Renaissance Capital, an institutional money management and IPO research firm in Greenwich, Conn., said in a recent report.
It's often said that IPOs are sold, not bought. That means a road show and a Q&A with the company's top officers--in short, marketing. Google's deal ignored the spadework....
...Google left money on the table--an IPO faux pas the Dutch Auction is supposed to correct.
Google's stock opened at $100.01 after the company priced the shares at $85 each, the low end of the revised $85 to $95 range and far short of the original filing range of $108 to $135. The company also cut the number of shares offered to 19.6 million from 25.7 million. The stock hit $113.48 in early trading and recently fetched $111.80.
The rule of thumb in the IPO market is: If the underwriter increases the price range, double your order; if the underwriter cuts the price talk, cancel it. Google cut both the price and number of shares offered, underscoring the deal's weakness at its original price. Was the revised deal deliberately underpriced? Were allocations short, driving up demand for shares in the aftermarket?
In general, the smart money sat this one out but many retail investors forgot the card shark's axiom: If you can't figure out who the sucker is, it's you.
Google looked like a killer deal when the company filed to go public. It was stronger than Netscape, Yahoo! (nasdaq: YHOO - news - people ), Amazon.com (nasdaq: AMZN - news - people ) and eBay (nasdaq: EBAY - news - people ), which all launched successful IPOs.
Google was a more mature company. It had been in business six years when it went public compared with three years for eBay and Amazon, two years for Yahoo! and one year for Netscape. Google went public with recent profits of $191 million, far eclipsing eBay's $3.7 million and red ink for Netscape, Yahoo! and Amazon.
When Yahoo! went public in April 1996, it had 43 employees. Google had 2,292. Ebay had 76 employees when the company launched its IPO in September 1998; Amazon.com had 256 in May 1997 and Netscape had 257 and August 1995, Renaissance Capital said.
In short, Google had everything going for it--except the Dutch Auction.
If a competitor knocks Google off its perch in the future, it will be remembered as the once hot company with the clever name that flubbed its IPO, eventually flopped in the market and bombed the Dutch Auction to oblivion. Well, one out of three ain't bad.