Tesla Motors (TSLA) comes off lockup Monday. Shares available for trading will triple Monday. Typically a potent IPO will fall, as venture investors take profits.
In this case, the funds hold such a large position, they may make a year-end distribution of Tesla stock rather than rushing to sell, leaving it up to the limited partners’ to decide to hold or sell, which might smooth out and delay profit-taking.
VentureBeat, which supplied this IPO photo, does a nice assessment of the lockup risk to the stock. Most telling Tesla has attracted a large short interest. The GM IPO drove up short interest, and it hit 22:1 at the end of October right before an earnings report. Right now the short interest expects a drop, and an informal poll of venture capitalists found the highest they expected Tesla to settle was at $18, a huge drop from its current price above $30. Grinches all!
Tesla has defied the skeptics. The stock popped after the IPO then fell below the offering price, but unlike another high-profile cleantech IPO, A123, Tesla then climbed back up and recently got to new highs. Tesla has scored great deals with Mercedes, Toyota (TM) and Panasonic (PC) (for batteries), buoying its prospects both as a business and a potential acquisition. It expects to unveil its next car in the January Detroit Auto Show.
In the slow Santa trading period, Tesla is the stock to watch.
Disclosure: I have a small indirect interest in Tesla