By on August 10, 2017

elio-otc-chart

The past year hasn’t been particularly kind to Elio Motors, the startup trying to launch an economical enclosed-tandem, front-wheel drive three-wheeler. The company seems to be no closer to starting production and in fact has shuttered most of their operations, including assembly of their production-validation prototypes, and laid off most of their staff, to concentrate on raising the money they need to start building trikes.

For a while Elio was flying high. They had over 60,000 reservations and a Reg A+ stock offering raised $16 million. That stock quadrupled in price and briefly gave the company a billion-dollar valuation. Then, starting late in 2016, a pattern started forming. Some kind of bad news for Elio would appear on folks’ screens, either another production delay, a SEC filing with ominous-sounding boilerplate, or local politicians in Louisiana, where Elio promised to start building vehicles in what was formerly a GM assembly plant in Shreveport, would start complaining about a lack of progress. The bad news would get amplified by Elio’s critics, and their over-the-counter stock price would take a hit. A year ago the OTC shares were pretty stable at around $20/share. Down from the high of $60, but still significantly above the initial offering price of $14/share. By the end of 2016, however, it had dropped to about $15/share and since then it’s had a series of drops to about $8, then $7 and most recently about $5/share. Elio seemed headed for penny-stock status, or worse.

Most recently, Elio had to get an extension on paying back money they owe the RACER trust, the corporate entity spun off from GM during its bankruptcy and bailout, organized to dispose of unneeded assets. Elio was also fined about a half-million dollars by the Louisiana Motor Vehicle Commission for what the commission, which appears to favor car dealers’ interests, said was operating as a manufacturer/dealer without a license. The issue at hand was the reservations that Elio has been taking from potential customers. Elio claimed that since no actual sales have been made, that the reservations simply represent a spot in line once production starts.

Regardless of the merits on both sides of that case, it’s quite clear that Elio has worn out its welcome in Caddo parish.

The slide in stock price appears, though, to have been at least temporarily arrested by a financial Hail Mary pass thrown by company founder Paul Elio. The other day Elio Motors filed an initial S 1 registration with the Securities and Exchange Commission, for an initial public offering of $100 million worth of stock to be traded on the NASDAQ exchange. That $100 mil would still keep Elio about a quarter-billion dollars shy of what they say they need to start production, and dangling that IPO carrot may or may not reverse the cratering OTC share price. After Elio’s filing, the over the counter share price initially went up about 60% to $8.40 but has since come back down to $6.30 as of this writing.

I’m sure that the upcoming IPO gives Paul Elio and what remains of his team hope but I’ve said all along, getting to production was going to be a long shot for Elio Motors. After some boom years, the American passenger-vehicle market has slowed. Even when it was booming, the stock prices for the American automakers didn’t reflect that. Investors put their money elsewhere. Now that the overall market is shrinking, if investors are shying away from Ford, which made about $10 billion last year, I don’t see the market embracing Elio’s IPO.

Still, for a few weeks it appeared that Elio Motors was circling the drain but maybe, just maybe, this IPO will turn things around.

Image Source: OTCMarkets.com

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31 Comments on “Elio Throws Financial Hail Mary With NASDAQ IPO Filing...”


  • avatar
    SCE to AUX

    A three-wheeled car with outriggers is simply a non-starter.

  • avatar
    turbo_awd

    I would say a 1-seater targeted at commuters (who are most likely family people) is a non-starter.. Even with my 20-mpg car, I can drive a LONG way on $7500k. Plus, I’m safer than in this thing. Plus I can take it on trips, take my kids to school, etc..

    This is targeted at a subset of Smart car drivers – and we know well that went..

    • 0 avatar
      JMII

      It hard enough to sell 2 door normal cars like the Accord Coupe. So I agree a 1 seat fuel sipper is doomed in today’s market. Might as well buy a Slingshot and some rain gear.

      • 0 avatar
        rudiger

        Love the mention of the Slingshot. Really highlights how tough it is to get a brand-new auto going. The Slingshot is just a three wheel motorcycle with very few automotive creature comforts and it’s still priced at $20k. I wonder how successful it’s been and can’t imagine it being built by anyone except an established builder of recreational vehicles (Polaris).

        The Elio’s price just kept creeping up. I think the original target was something like under $7k. For a cheap, actual automobile commuter vehicle, lots of offerings in the $13k range. The closer the Elio got to that price, the more irrelevant it became.

    • 0 avatar
      Russycle

      The Elio seats 3.

      Edit: Oops, 2. Guess I was thinking of Aptera.

    • 0 avatar
      JohnTaurus

      I could drive a long way on $7,500,000 as well.

    • 0 avatar
      tnk479

      “This is targeted at a subset of Smart car drivers – and we know well that went..”

      I have always wanted to meet a Smart car buyer and learn about what makes them tick. They are such a rare specimen that I imagine it is at least unique.

      • 0 avatar
        FuzzyPlushroom

        I have an Internet Friend who owns one – it was his wife’s daily driver until it caught fire, and now it’s his crazy project.

        He pilots a yellow MGB with big ol’ antennae in the 24 Hours of LeMons, though, so I’d say ‘unique’ is a good word.

      • 0 avatar
        threeer

        I’ve gone back and forth on the thought of picking up a used smart to drive back and forth to work. I have a 13 (or so mile) commute and it is just me in the car. A/C and a stereo along with protection from the elements is all I really need for that use. Not sure why I need a bigger footprint, other than, because larger is better. We have a bigger car for the family when we all go somewhere. But as others have said, for the price there are simply too many other viable options. Still, a piece of me just digs the silly things. Guess that makes me “unique.”

        • 0 avatar
          Flipper35

          Unless you have a parking issue or are driving all 13 mile sin the city you won’t gain much with a Smart car. My mother in law’s neighbor had one. Once he got out of the neighborhood his mileage dropped. His mixed driving average was in the low 30s.

  • avatar
    28-Cars-Later

    “For a while Elio was flying high. They had over 60,000 reservations and a Reg A+ stock offering raised $16 million. That stock quadrupled in price and briefly gave the company a billion-dollar valuation.”

    No bubble at all.

  • avatar
    MrGreenMan

    There was some hipster appeal to it in the same vein as fixed-gear, tube-constructed bicycles.

  • avatar
    indi500fan

    If fuel prices had kept rising (perhaps to the 5 to 7 dollar per gal range) AND they were actually able to manufacture and sell this thing for the original stated price, there was a slim chance to be viable.

    But let’s be honest, it’s no competition for a 3 yr old Nissan Leaf at 5 grand.

  • avatar
    PandaBear

    http://fortune.com/2017/08/02/unicorn-startups-overvalued-stock/

    Unicorn with payout guarantees to the most recent round of investors is the only reason they get this kind of valuation. If investors on each round were paid the same when they exit, they would not have put up with these valuations.

  • avatar
    bryanska

    We can say all we like about how we feel. The public was interested no matter how we “smart car guys” want to paint it. People even bought Smart cars, for a while. Shame they couldn’t line things up so we could see what the market said.

    Also, of course used cars are cheaper. That’s not really an argument.

    • 0 avatar
      tnk479

      It’s a great contrarian play right? If the economy implodes and we all wake up to realize the USA is the third world country that it will inevitably become, Elio investors may come off looking like geniuses.

    • 0 avatar
      indi500fan

      There are urban places where the small size could be a real asset – I’ve seen some in Baltimore, DC, Chicago, etc. But I think most of those folks don’t want the hassle of owning their own motor vehicle.

  • avatar
    Eyeflyistheeye

    I’m the only person in the world who knows how to save Elio. The shareholders should overthrow Paul Elio and let me run the company.

    I’ll go back to the drawing board, put cladding on the little turd and lift it up by two inches. Presenting America’s most affordable crossover!

  • avatar
    stingray65

    Jack it up 4 inches, install some big mud and snow tires and some manly trim and graphics, and call it some variation of “cross-country” or “all-road” or “X-somthing” and no doubt the number of reservations will triple.

  • avatar
    arach

    I owned an electric motorcycle manufacturing company.

    We were going to be HUGE. Gas prices were going to hit $10 a gallon and people would NEED them. I connected with the Elio company about putting electric drive trains in them.

    Then gas prices came down, and theres no signs of them going up. I folded my company 4 years ago and took the loss.

    I hope elio works, but I wouldn’t put a penny into a pre-order or to buy their stock. I don’t think the guy is a crook, but he doesn’t know how to run a startup.

    His only saving grace would be a steep gas price increase. His design is actually relatively efficient, so I don’t know why they didn’t take a $2 grand chassis and put a $1 grand 48V EV system into it instead of re-engineering the geo motor- at least then it would have some exotic appeal as a low cost EV alternative- it could have actually been cheaper to build. With his low weight and decent aerodynamics, he could get 180 miles out of a 10 KWH battery, which he could source for around $500. He could stick with Lithium Ion and drop the KWH a bit for $1500 or so too.

    If he can build his chassis even for $2500, and slap an EV drive train system in there for 2k, he could have a $4500 manufacturing cost. Bring it to market around $7000 and I think there would be some serious demand for an EV at that price point…

    I think those are actually cushy, as on a motorcycle we had our manufacturing costs down to $2600 for a 180 mile motorcycle. Our market price was going to be 5200, and the dealer cost was going to be 3800. I know the elio has more to it, but some of those components can be sourced more affordably than people tend to realize.

  • avatar
    WrittenDescription

    Between the cheesy copy on Elio’s website and the note that “Pep Boys [is] anticipated to be “Official Service Center” for service and warranty work”, I’m not feeling the vibe.

  • avatar
    danio3834

    Who will be the buyers of this stock after it’s become painfully clear this venture isn’t going to work out?

    • 0 avatar
      fred

      It has been painfully obvious that this venture isn’t going to work out since well before the Reg A+ filing, so there will always be some who don’t bother to do the research before purchasing stock in a doomed company.

  • avatar
    IBx1

    Given the market shift to CUV’s and the driving habits of the…wonderfully intelligent people, who own them, I wouldn’t feel safe for a second in something like that as a daily commuter.

  • avatar
    rudiger

    Seems like there’s always someone trying to come up with a successful three-wheel, enclosed-motorcycle, cheap commuter vehicle. The ingredients sound simple enough, saving money by using a three-wheel configuration, but my guess is that once the threshold is crossed into the real car world equipment and features, well, costs just get too close to those of the volume manufacturers who have been at it for decades.

    Even though it’s a completely different category, I consider it a minor miracle that Elon Musk has had the success he’s had. Maybe at some point he’ll give the cheap commuter vehicle a try.


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