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The California electric car company opened its first day of trading on Tuesday at $19 a share. By the end of Wednesday's session it was at $29.90. On Thursday, Tesla took a nose-dive, and after slumping earlier today to $18.71, it finally closed the week at $19.20. The moral of the story:
--Be careful about getting in on the ground floor of an IPO. Weird stuff has a way of happening in the first few days.
--Don't come out with an IPO in the midst of a major market sell-off.
--Steer clear of the hype. Tesla hasn't come close to making a profit and is relying largely on a $400 million grant for green businesses.
--Don't invest in a company whose only product is a $109,000 sports car, especially when the economy is veering towards another downturn.
On the bright side, the stock is up 20 cents on the week, which is more than you can say about much of the market.
Mark Lacter created the LA Biz Observed blog in 2006. He posted
until the day before his death on Nov. 13, 2013.