By on March 1, 2016


(Caveat: I know nothing at all about stocks, bonds or other financial instruments.)

After automotive startup Elio Motors raised approximately $17 million dollars in a Reg-A+ stock offering the company crowdsourced from small investors via StartEngine, it said its shares would be listed on the OTCQX exchange to provide those investors with liquidity.

It’s probably too early to call Elio another Tesla (whose own market capitalization probably exceeds its actual value), and I don’t know how many of those investors are going to sell their stock so soon. But, if they did, they would have more than doubled their money in less than two weeks as of Monday’s close.

Elio stock started trading on February 19, 2016, with an initial value of $15/share set by WR Hambrecht & Co., Elio Motors’ securities advisor. As of February 29, it was trading between $41.25 and $75.00 a share.

Volume is still light — a bit more than 3,300 shares were traded yesterday, with the average transaction involving less than 240 shares. Still, the news has to buoy those Elio fans who have gone all in and invested in the company in addition to having put down money to reserve an Elio trike, should it ever come to production.


Elio is using the money raised in the stock offering to build a series of validation prototypes. It still needs to raise about $200 million to start production and has been putting most of its eggs in the basket of its application for a loan from the U.S. Department of Energy’s Advanced Technology Vehicles Manufacturing (ATVM) program.

As mentioned above, I don’t know much about securities, but it seems to me that if its publicly traded Reg-A+ stock is attractive enough to investors that it’s significantly increasing in value, the other shares held by the company and its original investors should also be increasing in value as well. If that’s the case, selling off some of that stock might be an alternative way of raising capital versus hoping for an ATVM loan.

Elio Motors P5 Prototype 2016 NAIAS Detroit, Paul Elio

As Elio has pushed back its proposed start of production, some early enthusiasts have become disenchanted. There’s been some hearty back and forth between the lapsed converts and those who are still true believers in Paul Elio’s dream. With Elio Motors’ stock seemingly taking off, the true believers are crowing. We’ll see if they’re singing the same tune at the end of this year when Elio hopes production will start.

[Image Source: OTCMARKETS.COM]

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24 Comments on “Elio Motors Stock Soars in Over-The-Counter Trading...”

  • avatar

    The short of a lifetime if and when it’s short-able.

    It would be like money in the bank.

  • avatar

    The coverage of Elio here baffles me. No other two-bit sort-of manufacturer gets nearly the attention these guys get. Call me when they’re actually shipping products.

    • 0 avatar

      Ronnie is a bit obsessed. I actually like reading about Elio, although I remain skeptical about their viability.

    • 0 avatar

      I’ve said that the romance of starting a car company appeals to me. Lots of startups get attention, look at Faraday Future – at least Elio has built functioning prototypes.

      • 0 avatar

        Hm… Pays to do your homework. And although the final implementing of new NCAP regulations may take a while, I noticed that something else is underway that might spoil Paul Elio’s dream. His rebuttal was that the tandem seating makes his three-wheeler a no-car vehicle. But he did not count on the NHTSA’s intention to boost pedestrian safety. Check out:

        The Elio’s exposed front wheels and fenders don’t sit well with, and I quote, “new tests to assess how well vehicles protect pedestrians from head, leg and pelvic injuries that occur when a pedestrian is struck by a vehicle”.

      • 0 avatar


  • avatar

    Well, Ronnie, you did warn us that you knew nothing about financial instruments, and then you proved it.

    Saying that Tesla’s actual value exceeds its market cap is a non-sequitur. A company’s market cap *is* its actual value.

    • 0 avatar

      Depends on your definition of “value”: I think what Ronnie is saying is that he thinks Tesla stock is overpriced. But yes, if the stock market is correctly pricing Tesla shares you’d be right.

      Disclosure: I have an MS in Finance.

    • 0 avatar

      You forgot about Sentimental Value.

    • 0 avatar

      Isn’t the market cap, the value of outstanding shares held by the public? Does Ford’s market cap include the value of the class of stock that’s only held by Ford members.

      It seems to me that the market cap is how much it would cost to buy all of the stock in the company and, yes, that’s one measure of a company’s value, maybe the only true measure, but could you build a company from scratch, factories and intellectual property included, for what its market cap is?

  • avatar

    The problem with such an offering under this A+ regulation is the amount they can sell is limited.

    From the SEC: “The updated exemption will enable smaller companies to offer and sell up to $50 million of securities in a 12-month period, subject to eligibility, disclosure and reporting requirements.”

    Tier 2 is a $50M limit, while Tier 1 is $20M.

    -Tier 1, which would consist of securities offerings of up to $20 million in a 12-month period, with not more than $6 million in offers by selling security-holders that are affiliates of the issuer.

    -Tier 2, which would consist of securities offerings of up to $50 million in a 12-month period, with not more than $15 million in offers by selling security-holders that are affiliates of the issuer.

    So now I’m wondering which Tier they used. Tier 2 has more reporting recs, so I’m betting Tier 1.

  • avatar

    Not interested in this needle. I’m buying the haystack instead.

  • avatar

    Has the NHTSA already ruled in favor of Elio as a vehicle exempt from regular car crash testing? That may explain the sudden interest.

  • avatar

    I don’t care if you have Wharton and the London school in your CV, Tesla is in no way worth the current cap. But I am still baffled that Amazon, the perpetual losing machine, manages to remain solvent, so I guess I have proven my insight.

  • avatar

    Who are these mysterious people bidding up the price of this stock?

    This will most likely not end well. But a few will make out really well.

    Let’s have a follow up article on this in a month or 60 days and see what the stock price is then.

    • 0 avatar

      Some of the entrepreneurial and investor sites are saying that elevated stock price gives Elio Motors a market cap of over a billion dollars now. Between the volatility of something newly offered, and the small sample numbers of trades and shares traded, I’d hold off on throwing numbers like that around until there’s a track record of at least six months. That time frame would put Elio close to the end of 2016, when they hope to start production. If the production tooling gets bought and they start hiring in Shreveport, I’d expect the stock prices to at least not dive.

      I do think this introduces a twist to the story. Until now, Elio has put a lot of hope into getting the $200 million they need to start production from a U.S. Dept of Energy ATVM loan. If the OTC stock prices stay high, that should open up other financing options. The OTC stock represents a fraction of the total equity of the company.

      There’s an Elio critic who’s made some noise about a 1:500 stock split mentioned in Elio SEC filings last year before the Reg A+ offer. Looking at the rest of his web site, though, it’s clear that the guy is a deranged, Jew-hating, conspiracy theorist so I question his reliability. That being said, Paul Elio, Stu Lichter and other Elio insiders likely hold quite a number of shares in the company. If the OTC price stays high, those insider shares become valuable.

  • avatar

    Unbelievable. I can’t tell you how many 3 wheeled failmobiles I’ve witnessed debuting in the media, going back to the “Dale” fiasco in the 70’s. Americans won’t buy a 3 wheel closed car. Just stop it now.

    • 0 avatar

      The Dale will forever be the albatross hung on any proposed three wheeler, particularly if it has some kind of composite body. I told that to Paul Elio the first time we spoke.

      On my recent visit to the Petersen museum in LA, they graciously gave me access to their basement “vault”, where most of the museum’s own collection is stored (most of the cars on display upstairs are loans). One of those cars is a Dale prototype. Between the Detroit and Chicago auto shows, three car museums and a McLaren in LA, and the Detroit Autorama custom car show, I’ve shot about 3,000 3D photo pairs. I’m about halfway through processing and editing them. When I get to the Dale pics, I’ll likely post something here about the scam.

  • avatar

    Illiquid penny stocks gyrate so much and so often for reasons completely unrelated to the actual business that their prices are not an indication of anything at all. You might as well try to divine their prospects from tea leaves or how many press releases they’ve had recently.

  • avatar

    This suffers from the ‘Bitcoin Problem’ – if you don’t have enough volume to buffer the market rate, then the market rate is irrelevant.

    It’s great that one guy paid $50 for something, but if no one else is willing to, the price isn’t very durable.

  • avatar

    “I don’t know how many of those investors are going to sell their stock so soon. But, if they did, they would have more than doubled their money…”

    By the sounds of things, if more than a dozen of them did, the stock value would collapse and everybody else would be SOL. The volumes here just aren’t high enough to draw any sort of conclusions about the business.

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