Tesla shares sink below original offering price
Green automaker last week enjoyed one of best IPOs in the past year. But shares have since sunk below original asking price. Is this a market correction?
After an impressive debut, Tesla Motors shares have sunk below their original initial public offering price of $17 per share.
As of this writing, Tesla shares are trading at $15.70. That's a steep decline from the company's ending price on June 29, when the stock was made public. On that day, shares ended up 70 percent at $23.89 per share. On June 30, the stock hit a high of $30.42 per share.
From a purely financial perspective, some might not think Tesla the most viable investment target. The green automaker sells expensive cars, headlined by its $109,000 Roadster, that have yet to catch on across the world. According to Tesla, it's sold about 1,000 Roadsters since the company's inception. And in documents filed with the Securities and Exchange Commission, it said it it expects "the rate at which [it] will incur losses to increase significantly" as the company continues to expand its operations.
That doesn't typically inspire confidence in investors, especially when the company lost $55 million last year alone.
Tesla did not immediately respond to request for comment.