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Home / Business / Why Tesla Stock fell on Wednesday – The Motley Fool

Why Tesla Stock fell on Wednesday – The Motley Fool



Shares of Tesla (NASDAQ: TSLA) were hit on Wednesday and fell by as much as 5.8%. The stock ended the trading day with a minus of 3.8%.

The stock's decline was likely triggered by a downgrading of an analyst's stock price and the news that Tesla is cutting its working hours for model S and X production.

  Tesla vehicle production

Tesla vehicle production. Source: Author.

So what?

"Given the anticipated deliveries by 201

9 in the fourth quarter of 2018, the fourth quarter of 2018 is likely to be in transit, but given the price / mix headwind, the third quarter of 2018 may have been the highest in that decade," said RBC Capital Market analyst Joseph Spak on Wednesday (as Bloomberg reported). Addressing these concerns about the Company's profitability prospects and high valuation of the stock, Spak rated its rating for the stock from "sector performance" to "underperformance". In addition, the analyst set a target price of 12 months for 245 US dollars (previously 290 US dollars).

In a separate release, the company reportedly discontinued some production times of Model S and X as part of its recent announcement of 7% fewer employees than full-time employees.

Tesla gives the media this comment on the reduced production times of Model S and X:

Recently, we announced that we will not accept orders for the 75 kWh version S and X to streamline production and with Model 3 to differentiate even more. As a result of this change and to improve the efficiency of our production lines, we have reduced the production times of Model S and X accordingly. At the same time, these changes and continuous improvements give us the flexibility to increase our production capacity in the future as needed. We'll be providing more details about our win call next week.

Well, what

Investors are likely to get more context next week, both in terms of management's profitability prospects and in terms of reduced production hours for Model S and X vehicles for both companies. Tesla announces its fourth quarter results on January 30th.


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