Tesla Inc. (NASDAQ:TSLA) stock was down 5.2% at the bottom of the noon hour on March 28. Shares of Tesla have now dropped 10.3% in 2018.
In late February John Lovallo, an analyst at Bank of America, predicted that fundamental problems would send Tesla’s stock into a tail spin. He set a price target of $65. Lovallo has been a notorious Tesla bear, but more are piling on as Tesla’s stock struggles in the opening months of 2018. Goldman Sachs Group Inc. also downgraded Tesla after it missed a key Model 3 production target.
Hedge fund manager John Thompson recently projected that Tesla would face bankruptcy within four months unless CEO Elon Musk is able to “pull a rabbit out of his hat”. The fund’s biggest position is its Tesla short.
In an email to clients, Thompson cited problems in delivering on its Model 3 production. The Model 3 has been pushed as an affordable alternative, coming in at around a $35,000 price tag for potential buyers. Tesla has also experienced softening demand for the Model S and X, and is facing a further credit downgrade from Moody’s Corporation after it already bumped it down to a B2. The price on its eight-year junk bond hit $0.903 on Tuesday which represented its lowest point since issuance.
All eyes will be on Tesla as it prepares to unveil its next round of earnings in the first week of April.
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