Tesla Succumbs to Market Pressure - TheStreet

(Tesla story updated with latest share price, volume figure and CEO news)
NEW YORK (TheStreet) -- The Tesla (TSLA) - Get Report fever that raged on a day after its IPO on the NASDAQ Tuesday cooled down significantly by the end of the trading session, along with the broader stock indices, settling 0.3% lower to $23.83, with a trading volume of 17 million.

Earlier, investors had driven shares of

Tesla Motors

up 19% to $28.39 just two hours into the day's regular trading session.

On Tuesday morning, Tesla's IPO had debuted to robust trading, with the stock opening at $19 and hitting an intraday high of $25 during the day. This compares with the $17 a share price the electric carmaker had announced for 13.3 million common shares ahead of the IPO. On Tuesday, more than 18 million shares of the stock traded hands.

According to


Tesla's 39-year old chief executive Elon Musk has raked in a minimum of $24 million from the company's initial offering, helping him make back some of the money he put into the Tesla and other startups. The remainder of his 26.9 million shares in Tesla added to roughly $641 million based on Wednesday's closing price.

The report also said that Musk only had about $650,000 in liquid assets in February after raising roughly $300 million in proceeds from the sale of


and PayPal, now an


(EBAY) - Get Report


Despite the red hot interest in Tesla's IPO, auto analysts are still skeptical about its ability to compete with, for example, GM's much-anticipated IPO, which expected to take place later this year.

Analysts wonder how the IPO of the unprofitable electric carmaker will fare over the long term. GM, by comparison, is steadily gaining market share around the world, most notably in China -- the world's largest auto market.

Still, that hasn't prevented investors from putting their faith in Tesla's sleek, electric, Model S sedan, which they believe will be a huge hit when it comes to a market they apparently believe is craving fuel efficiency and seeking relatively affordable cars that fulfill this need.

Tesla is already taking reservations for the roughly $50,000 Model S, which is expected to come to the market by 2012.

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-- Reported by Andrea Tse in New York


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