Tesla Shares Drop 9 Percent After Elon Musk’s ‘New York Times’ Interview
Tesla lost $5.5 billion in market value on Friday, in response to CEO Elon Musk’s interview with the New York Times earlier today. According to the Associated Press, shares dropped to $305.50, a loss of 9 percent, after Musk said in the interview that job stress was taking a toll on his health.
As reported previously by the Inquisitr, Elon Musk revealed that this past year has been “excruciating” and “the most difficult and painful year of my career.” Just last week, Musk sparked controversy with a series of tweets in which he suggested that he would take the publicly-traded company under private ownership at $420 a share, and that he had secured funding to do so.
Musk’s tweets may have broken the 14e-8 of the Securities Exchange Act of 1934, and have resulted in the initiation of a federal investigation, as regulators are wondering how much of this information was shared with Tesla’s directors. Investors have also filed a lawsuit against Musk, saying that his comments were meant to disrupt short-selling of the stock. Tesla suffered a net loss of $709.6 million in the first quarter of 2018, partially in response to concerns about the Model 3 sedan.
Yahoo Finance reports that Tesla has been working to ramp up production of its Model 3, but has been losing cash in the process. UBS analysts question whether the Model 3 will be profitable for Tesla, predicting that the company could lose $6,000 on every base model sedan, with profit margins below that of a conventional BMW.
BBC reports that other analysts are also concerned about Tesla’s performance, including the ability of Elon Musk to continue to run the company. Crispin Odey, a hedge fund manager in London, told investors that “Tesla feels like it is entering the final stage of its life.” However, Tesla’s directors are pushing back, saying that “there have been many false and irresponsible rumours in the press about the discussions of the Tesla board,” and have released a statement of support of Elon Musk.
“Over the past 15 years, Elon’s leadership of the Tesla team has caused Tesla to grow from a small start-up to having hundreds of thousands of cars on the road that customers love, employing tens of thousands of people around the world, and creating significant shareholder value in the process.”
According to CNBC, today’s price drop marks the worst day in two years for shares of Tesla, its worst performance since falling 10.45 percent in June of 2016.
