Tesla Motors: Not so different after all

Tesla Motors' stock has become a handy object lesson in how cleantech IPOs cannot escape their fate.

By Heidi N. Moore, contributor

Tesla (TSLA) enjoyed an encouraging first day of trading when it went public last week. The stock turned in a whopping 40% increase to its $17 offering price, to close the day at $28.39. At one point, it even traded at a 70% premium to its offering price. For a minute there, Tesla looked like what famed venture capitalist John Doerr had asked for: a "Netscape moment" for cleantech IPOs.

Unfortunately, as our friends at CNN Money point out today, and as we suspected last week, the hype and dazzle weren't sustainable. Tesla's stock started trading below $17 yesterday, and today it opened at a watery $16.40. Tesla's one-week range says it all: The shares have traded at a high of $30.42 and a low of $15.56.

This makes sense. The underwriters of the IPO, led by Goldman Sachs (GS), could only support the shares for so long before market forces took over. And the market, in turn, has shown intense skepticism for cleantech stocks over the past five years.

It's a pattern most visible with IPOs of solar companies. In 2004 and 2005, there was a golden age of growth for solar companies, with big venture capital investments. In 2006, there was a strong wave of such IPOs, and their stock prices fizzled within six months. This year, again, solar company Solyndra had to pull its IPO. The problem then, as now, was always the same: high costs and low profits. Clean technology is expensive, and it doesn't have the benefit of the extensive government subsidies that go to fossil fuels like oil.

So Tesla, which makes electric-powered cars, shouldn't take its stock disappointment too seriously. It's not personal; the market has just shown itself unsupportive of clean technologies until they really, well, clean up. Rather than being the unquestioned golden child of the cleantech sector, Tesla now has something to prove -- and that's exactly as it should be.