[ad_1]
Teslas has just become cheaper – just like the stock of the company.
Shares of the electric car maker dropped nearly 8% Friday after Elon Musk unveiled a long-awaited version of the company's Model 3 mass-market sedan, which costs only $ 35,000.
Musk, which previously billed the cheapest model 3 over $ 42,000, also cut Model S and X prices, including a $ 18,000 drop for Ludicrous models.
But to pay the rebates, Musk said Thursday night, Tesla will close most of its stores, fire employees and move global sales exclusively online.
That, combined with Tesla's return on its promise of a profit this quarter, has made Wall Street less enthusiastic about the chances of Model 3 becoming more widespread – and more concerned about margins and slowing demand.
"We think they have problems moving vehicles and their inventory is building up," said Garrett Nelson, an analyst at CFRA Research.
"It's almost as if they were desperate, as if their sales had fallen so much that they were doing everything to support the demand."
DA Davidson analyst Tom Forte said investors were also scared of Tesla's debt. He paid $ 920 million in cash on Friday, noting that Model 3 margins in the budget were well below those of his high-end vehicles.
"In the longer term, it can be argued that their ability to repay their debt if they can not maintain their profitability is a cause for concern," Forte said. "They went from $ 1.93 last quarter to a loss this quarter. Their profitability problems could very well go beyond this quarter. "
Nelson has assumed that the early arrival of model 3 at $ 35,000 could be linked to Musk's scrap with the Securities and Exchange Commission. Earlier this week, the SEC asked Musk to be found in contempt of court for posting a tweet about Tesla's production figures, which the watchdog said were misleading.
Indeed, just hours after the announcement of Model 3, Musk revealed in a court record that he had appeared before Enron's former attorney, John Hueston, with his legal team.
Columbia Law School professor John Coffee told The Post that he did not view Musk's legal team as an admission of concern for the SEC, but rather as a reflection of his personality. "It seems to me consistent with what it usually does, which is to change everything every 72 hours," said Coffee.
Tesla shares ended the day down 7.8% to $ 294.79.
[ad_2]
Source link