While Tesla's stock price had a rough week and media outlets poured on the negativity, one prominent venture capitalist compared the Model 3 launch to the iPhone 2007 launch.
Bad News: First the bad news. Tesla shares (up slightly Friday) plunged 20 percent by Thursday's close (via CNBC). "Traders consider a 20 percent decline from an all-time high the technical definition of a bear market move," CNBC said. That story was replete with critical comments about Tesla from analysts, including:
[Tesla's] $100,000+ models aren't selling as well and are piling up in inventory...This bubble stock is losing air rapidly, as it should.
--Fred Hickey, editor of High Tech Strategist via CNBC.
Negative comments like that were driven by two things: second-quarter delivery numbers, which Wall Street didn't like because they "missed" the Street's consensus on projected deliveries, and a crash safety report (see below). The negativity bled over to the Model 3. “While it is nice to see Tesla finally hit a stated target on time, we question whether 30 vehicle deliveries essentially built by hand count as ‘mass production,’” Cowen and Co. analyst Jeffrey Osbourne wrote in a note to clients, as reported by Bloomberg. Musk said last week that the target is to hit 20,000 Model 3s per month by December.
The Wall Street Journal chimed in too with this scary headline: "Tesla’s Skid Is Coming at the Worst Time" -- which CEO Elon Musk tweeted about on Saturday (below). "Analysts at Guggenheim Securities, which have a $430 price target on the stock, about 37% above its current level, predict that gross margins on the Model 3 will be negative 15% at the start of the launch. Gross margin won’t turn positive until the middle of next year," the Journal said.Read More...
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