So, Why not an Aptera I.P.O.?

[byplug]

What about the Aptera 2e that carries 2 passengers?
Will the new government bill require 4 passengers to get Fed money?

So, Why not an Aptera I.P.O.?

I think that Aptera has a better 'solution' story to tell than most of the electric vehicle companies to date. This could be a 'perfect storm' for Aptera.

An initial public stock offering or I.P.O. seemed like it used to happen every other day a few years ago. Today, stock investors, starved for something new and looking for the next new opportunity, are investing in new technologies (**see A123 reference below). If our government can give half a billion dollars (of our money) to electric car designers like Fisker and Tesla, that shows that the future is headed electric.

So, why shouldn't Aptera offer some private stock to (very) loyal reservation holders and then launch an I.P.O. to raise money. If an electric car battery maker like A123 can go I.P.O. at this time, why not Aptera? Aptera is in a unique position with very high visibility, some big name initial investors (who would likely appreciate an I.P.O.), working prototypes, and unique future product(s). Combine that with an initial starting price point of $25,000 for the basic Aptera 2e and a tremendous growth path that includes over 4500 reservation holders with deposits on future vehicles, Aptera is way down the road. Now, throw in the potential to sell their vehicles through a retail technology company like...say.... Best Buy? That business relationship would give them a distributorship of about 1023 stores in the U.S. alone. win win.

**A123's shares surge 50% on first day of trading"A123 (Nasdaq: AONE) priced its initial public offering at $13.50 a share, estimating that the stock sale would bring in some $378 million. The stock closed the day at $20.29 a share, up 50.3 percent on the day." Friday, September 25, 2009, 5:30am

http://boston.bizjournals.com/boston/stories/2009/09/21/daily61.html

[KarenRei]

Too early. You generally don't launch an IPO until you feel you've proven yourself in the marketplace, until you've retired a lot of your startup-risk. And today's market isn't really the best time, either.

In a couple years, I'm sure they'll launch an IPO, and I'll be one of the first in line to buy their stock. :)

[NmGfan]

The Sarbanes-Oxley Act of 2002 pretty much ended start-up companies abuses of the IPO market. Way too many .com's launched with IPO's based on excitement and hype (irrational exuberance era) with no substance and then crashed leaving POed share holders with an empty bag of hot air. So no more feeding at the IPO trough with BS business plans. The accountability requirements are very onerous and expensive to maintain for small start-up companies today, so they generally avoid IPO's until much later in the growth cycle, if ever (lookin' to be acquired or merged is the mantra today).

:happy0025:

[SEGsby]

Yeah, Karen's right. Too early.

[esmith]

There's an important difference between Aptera and A123. Just in 2008, A123 delivered more than $50 million worth of batteries & such to paying customers. Over its lifetime, it made and shipped enough batteries to power 50,000 electric cars. Aptera is yet to make a penny.

For a company such as Aptera, an IPO is an option of last resort, because the lack of revenues will severely hurt their valuation and they will give away their shares for a pittance.

More generally, asking private investors for any money is a bad idea for a startup, it dilutes founders' stake and takes away control. The best option is to try to get profitable without anyone else's money. The second best option is to get a government loan.

An IPO is more likely once they have delivered to everyone on the wait list, to generate cash infusion necessary to expand into other states.

[Marc]

More generally, asking private investors for any money is a bad idea for a startup, it dilutes founders' stake and takes away control.

No way man! Totally wrong way to think. Startups need cash - that's a given. If you have a steep top-line in the out years, AND you have a market window to contend with, you've got to live with a low "belly" short-term where your expenses > revenue for building capacity. Private investors make it happen efficiently. Sure - you give up equity and some control, but hey - you married? How much equity and control did you give up for that? :)

That said, your financing needs have to match your growth prospects. If you want to grab the tail of a tiger (steep growth), you need some strength behind you - MONEY, and in the process I guarantee you you make great long-term friends. That is, if you pick your investors wisely.

[KarenRei]

Yep. "Dilution Happens". You just try to get as much as you can from grants and loans, and get yourself as good of a valuation as you can when you sell equity.