On Thursday, Tesla (TSLA) stock opened at $265.71, down about 10.5% from its previous day’s closing price. As of yesterday’s close, the company had already lost 12.3% on a YTD basis, underperforming the broader market and its peers. Meanwhile, the S&P 500 Index and the NASDAQ Composite Index have gone up by 14.6% and 19.0% YTD, respectively. Now, let’s look at the top three factors that triggered a massive sell-off in Tesla.
WAKE UP WITH BAGELS & STOX, OUR NEW EMAIL THAT ENTERTAINS AND INFORMS YOU BEFORE THE DAY STARTS. SIGN UP HERE!
Q1 2019 car deliveries missed estimates
On Wednesday after markets closed, Tesla released its first-quarter car production (XLY) and delivery figures. During the quarter, the company delivered about 63,000 units to its customers, reflecting a 110% YoY jump but a sequential decrease of 30.7%. Tesla blamed extended transit times and transportation issues for its lower car deliveries. It managed to deliver 50,900 Model 3 units in the first quarter and 12,100 Model S and X units. According to IBES data from Refinitiv, Wall Street analysts were expecting Model 3 deliveries to be around 58,900 units. Tesla’s Model 3 deliveries estimates miss hurt investors’ sentiment.
Elon Musk versus the SEC
Later today, Tesla CEO Elon Musk’s lawyers and the SEC are scheduled to present arguments in a case related to Musk’s tweet about Tesla’s 2019 car production estimates. The regulatory authority has requested the court to hold Musk in contempt for violating the settlement agreement that came into effect after Musk’s and Tesla’s legal battle with the SEC in 2018.
According to Thomson Reuters, many popular Wall Street research firms and investment banks including Wedbush Securities, Cowen and Company, Canaccord Genuity, and JPMorgan cut their target price on Tesla stock. These downgrades were one of the key factors that triggered a massive sell-off in Tesla stock today.