Finance

Another fatal crash prompts Tesla shares sell off

Another fatal crash prompts Tesla shares sell off

The stock has a consensus rating of "Hold" and a consensus target price of $322.64.

The safety board is also investigating the Uber accident in Tempe, Arizona, in which the car's systems failed to slow the vehicle as a 49-year-old woman crossed the street pushing a bicycle.

As for the severity of the crash, the company pointed to a highway safety barrier that was modified. Issues examined include: "post-crash fire, steps to make vehicle safe for removal from scene", said the NTSB.

The impact caused Huang's vehicle to catch fire, the CHP added.

Tesla also wrote that it is working with authorities to recover the vehicle's logs in hopes of having "a better understanding of what happened".

Tesla shares sunk by 8% on Tuesday and another 2.3% in pre-market trading on Wednesday to leave the mat US$272.63 - their lowest level for a year.

A missing or damaged safety shield on the end of a California freeway barrier worsened the impact of a crash involving a Tesla SUV that killed a man last week, the electric vehicle maker said on its website. The news that the NTSB is looking into the crash has spooked some Tesla investors as the company's stock dropped sharply after the investigation was confirmed.

- Tesla simultaneously extended its "deepest sympathies" for a fatal, fiery crash and blamed the severity of it on the fact that a highway barrier on USA 101 in Silicon valley had either been removed or crushed without being replaced.

The company itself offered up a few details about the accident in a blog post late Tuesday. The pedestrian died from the collision. Stock has got OUTPERFORM rating from 3 analyst (s) whereas last month 3 analyst (s) have given outperform rating.

"There's just so much bad news right now", John Thompson, the chief executive officer of Vilas Capital Management LLC, which is shorting Tesla shares, said by phone.

Tesla Motors Inc (NASDAQ:TSLA)'s credit rating was downgraded by Moody's Investors Service on Tuesday as the electric auto company burns through cash, fails to meet production expectations and may soon have to raise more than $2 billion.

"Model X is the first SUV ever to achieve a 5-star safety rating in every category and sub-category, the lowest probability of occupant injury, and a rollover risk half that of any SUV on the road", the company says on its website.

Moody's said its negative outlook for Tesla "reflects the likelihood that Tesla will have to undertake a large, near-term capital raise in order to refund maturing obligations and avoid a liquidity shortfall".

Bernstein analyst Max Warburton on Wednesday pointed to heavy reliance on automation at Tesla's Fremont plant as a key factor behind the troubled Model 3 production ramp-up.

Even though the company was able to rake in $3.29 billion previous year, analysts believe that sum is not enough to keep Tesla afloat.

"We have in the past questioned Tesla's promise that the current hardware will be able to eventually provide full self-driving capability", Cowen analyst Jeffrey Osborne, who rates Tesla as "underperform", wrote in a note.

Amid all the negative sentiment surrounding Tesla stock right now, the Morgan Stanley analyst sees "one of the buying opportunities that many investors have been waiting for".


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