When it rains, it pours. Tesla Inc. (NASDAQ: TSLA) is getting rained on and it is indeed pouring. Since reporting first-quarter results on May 2, the stock has dropped more than 5.5%.
Several top executives have left the company. That’s never a good sign. Since the beginning of the year, eight executives, including Tesla’s chief accounting officer, have departed. Two more energy unit executives reportedly resigned yesterday.
In addition to the chief accounting officer, the head of Tesla’s Autopilot hardware team and the company’s treasurer/vice-president of finance also have moved on. CEO Elon Musk has attempted to cast these departures as a reorganization, but the facts point in a different direction.
Tuesday was a big day for bad news. Investment proxy advisory firm Glass Lewis recommended that shareholders vote against the reelection of three Tesla directors, including lead independent director Antonio Gracias, Twenty-First Century Fox CEO James Murdock and Musk’s brother Kim. Glass Lewis also recommended that the offices of chief executive and board chair be separated.
Long-time Tesla analyst Adam Jonas, who has long been bullish on the stock, cut Morgan Stanley’s price target on it from $376 to $291, a haircut of 23%, attributed to continuing manufacturing problems with the company’s Model 3 sedan.
That happened shortly after a report that Tesla plans a six-day work stoppage on Model 3 production at the end of this month to sort out lingering problems on the assembly line. CEO Musk, in an email reviewed by website Electrek, told employees that the company would hit a weekly production rate of 500 Model 3 units a day this week. The goal is to reach production of 6,000 units a week by the end of June, triple the rate the company achieved last month.
Last Friday a Tesla Model S sedan collided with a fire truck when the car failed to stop. It is unknown whether the Autopilot feature was engaged at the time of the crash, but any Tesla crash makes headlines, whether that’s fair or not.
Finally, a bit of good news: In the first quarter of 2018, investor George Soros took a $35 million stake in Tesla convertible bonds due in March 2019. The investment indicates at least a little support for the company. And that’s about it for the good news for Tesla over the past few days.
In Wednesday’s premarket trading, shares were down about 0.6% to $282.41, in a 52-week range of $244.59 to $389.61. The 12-month consensus price target on the stock is $316.92.