Tesla has fallen in the last couple of days
Tesla saw negative price action on May 16 after the National Transportation Safety Board said in its preliminary investigation that Tesla’s autopilot feature had been in use in last year’s fatal crash of a Tesla Model 3 in Delray Beach, Florida. Reports that T. Rowe Price had sold most of its Tesla stock also put pressure on Tesla in May 16 trading.
Today, the markets are reacting to an email Tesla CEO Elon Musk sent to employees in which he talked about controlling costs. Musk will now be closely monitoring the company’s expenses. He said in an email to employees, “Going forward, all expenses of any kind anywhere in the word, including parts, salary, travel expenses, rent, literally every payment that leaves our bank account must (be) reviewed.”
Tesla surged earlier this month after it announced that it would raise $2 billion through a stock issuance and convertible notes. At the same time, U.S. Steel Corporation, the once-iconic steel producer, fell sharply after unveiling a $1.2 billion capex plan.
Today, the markets seem to be punishing Tesla for its aggressive cost-control measures. While cost-control measures are generally positive for a company, Musk used words such as “hardcore” and talked about examining every expenditure, which could be making investors apprehensive. Tesla stock has fallen to a fresh 52-week low today.
In the past, Tesla stock has seen wild price swings in the wake of Musk’s tweets—including the infamous tweet in which he discussed taking Tesla private. Because Musk’s Twitter activity has been relatively subdued as of late, his email seems to be filling the void for Tesla bears.