Tesla Stock Soars on Day 1

Tuesday, Jun 29, 2010  |  Updated 3:00 PM PDT
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Tesla Roadster Unveiled

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Tesla did well on its first public day.

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Shares of Tesla Motors Inc. soared in their first day of trading Tuesday, gaining $6.89, or 40.5 percent, to close at $23.89. That marked the second-biggest first-day gain among initial public offerings this year.

Tesla's initial public offering raised $226.1 million after selling 13.3 million shares for $17 a piece. Tesla had expected to sell just 11.1 million shares at $14 to $16 per share.

But there is a risk involved with all that cash investment: Tesla has never made a profit and has sold just 1,000 of its Roadster electric cars. But it is betting that buyers will take to electric cars once it rolls out its Model S sedan in 2012.

Still the company hasn't had a profitable quarter since it was founded in 2003, and has sold only 1,000 of its high-end Roadster sports cars and CEO Elon Musk's recent financial troubles has not helped to calm some investors' nerves.

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