Tesla has a potentially damaging slip in the Market?
Tesla and Elon Musk have had a disappointing week. A slip in the stock market meant that the company has hit the news. Adam Jonas & Morgan Stanley, Wall Street analysts, have shocked everyone by downgrading the company from an "overweight" rating to a mere "equal-weight" rating on concerns that competition might level out.
The company has been burning through some serious cash in the mist of creating new models, but has not yet delivered on promises made for 2017. They are also at risk of competition from other tech giant companies such as Alphabet, Amazon & Apple, sending Tesla's shares sliding. This resulted in a 2% drop in TSLA shares last week.
Its an arguable fact that Elon Musk has created some fantastic technology in his time & by creating electric vehicles that sit comfortably in the mainstream market, he is certainly a visionary of what else is to come in the future of the motor industry. Although, it is proving very hard for his investors to install faith in the man who in the last 3 years has reportedly lost $1.8 billion. The term "you have to spend money, to make money" is normally used in this case. But not forgetting that this is other peoples money, who at this stage would really like to see some return, it is starting to ruffle some feathers.
The first quarter of the Model 3's commercial existence doesn't look pretty. Musk is known for his way of over-promising and under-delivering, then spending more money than expected to do both!
The bottom line is Elon Musk is reaching the time when he has to produce results... real profits. There will be a time when his competitors will steal the market share back, which Jonas thinks could be sooner rather than later.
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Posted on 17th May 2017 at 10:43 AM
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