NEW YORK (MarketWatch) -- Toyota's $50 million investment in electric car start-up Tesla Motors Inc. will help Tesla's already-bright prospect for its initial public offering, an IPO analyst said Friday.
John Fitzgibbon of IPOscoop.com, said Tesla will soon add Toyota Motor Corp.'s (TM 75.12, +1.12, +1.51%) name to its list of high-profile investors in an upcoming amendment to its IPO prospectus.
"Having Toyota involved gives them instant credibility," said Fitzgibbon, who currently rates the company as a three-star IPO on a scale of one to five stars.
Tesla Motors Tesla's electricity-powered roadster. Toyota joins a list of investors in Tesla including Germany's Daimler, the Abu Dhabi government, and venture capitalists Elon Musk, Tesla's chairman and chief executive officer, and Steve Jurvetson, among others.
"This is supposed to be the wave of the future and it never happened," Fitzgibbon said. "But Tesla has larger revenue than past electric-car startups and now it has a $50 million infusion from one of the leading auto competitors. So that certainly tells you that somebody has confidence in this thing."
Fitzgibbon said Tesla Motors already ranked among the most visible-initial public offerings on the plate for 2010 because of its appeal as a low emission product.
"You have the ecology thing behind it and the appeal of not relying on oil from Saudi Arabia or oil squirting into the Gulf of Mexico," Fitzgibbon said.
Tesla filed plans to go public on Jan. 29 as part of its push to raise money to produce electric cars for the mainstream market. The company said it planned to raise up to $100 million, at the time.
Since then, Tesla has filed two amendments to its IPO prospectus, but it has yet to disclose an estimated price range of its offering or even a proposed trading symbol or stock exchange.
Once it releases a target price, Tesla will go on a road show to prospective IPO investors about two to three weeks ahead of its actual stock market debut.
In 2009, Tesla reported $112 million in revenue and a net loss of $56 million, with an accumulated deficit of $260.7 million.
It sold a total of 937 Tesla Roadster electric cars as of Dec. 31, 2009.
It's planning wider production of its Model S sedan. The company said it had plans to begin volume production of the car in 2012 with a target annual production of up to approximately 20,000 cars per year, priced under $50,000.
GXY Price at posting:
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