Tags: tesla | stock | drops | model s | fire | analysts

Tesla Stock Drops After Photos of Model S Fire, Analysts' Reports

Thursday, 03 Oct 2013 08:37 AM

By Michael Mullins

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
Tesla's stock fell sharply Wednesday after the electric car company received a negative analyst report Tuesday and photos surfaced of its Model S sedan catching fire, calling into question the car's safety that had previously been considered solid.  

The stock began the day at $193 and closed Wednesday at $181, a six percent drop in just seven-and-a-half hours. The stock hit an all-time high on Monday at $194.50.

Editor's Note: ObamaCare Is Here. Are You Prepared?

Among the negative reports that likely contributed to the stock's drop Wednesday was a downgrade on Tuesday from the employee-owned financial services firm Baird.

Other negative reports came from analysts at Bank of America, who rated the stock "vastly overvalued," considering the stock was recently trading at more than 100 times its 2014 earnings estimate, CNN Money reported.

Even Tesla founder Elon Musk, the company's current chairman and CEO, described the company's stock investors as "very generous" during an August interview with CNBC.

"The market is being very generous, and their actually giving us a lot of credit for future execution," Musk told CNBC. "I really feel like the evaluation we have right now is more than we have any right to deserve honestly. We need to make sure we really knock the ball out of the park in the coming years."

In addition to Baird's downgrade and Bank of America's skepticism, other market analysts have valued Tesla's stock at $45 per share, a 75 percent decrease from the current price.

And then there were the photographs of a Tesla Model S on fire near Seattle, Wash. that were posted on the auto website Jalopnik.com on Wednesday.

The photo depicts a blackened Model S with its almost entire front end charred to a crisp as fire fighters attempt to put out flames.

The fire reportedly began after the car had collided with another object on the road.

Tesla was quick to issue a statement regarding the incident on Wednesday.

"Yesterday, a Model S collided with a large metallic object in the middle of the road, causing significant damage to the vehicle," Tesla said. "All indications are that the fire never entered the interior cabin of the car [and] was extinguished on-site by the fire department."

According to Tesla, the fire was not ignited by the electric car battery itself, a fear that has routinely plagued the electric car industry, but rather it was caused by the impact of the object when it struck the battery pack.

"Because each module within the battery pack is, by design, isolated by fire barriers to limit any potential damage, the fire in the battery pack was contained to a small section in the front of the vehicle," Tesla added.

There were no injuries reported in the accident. But the photo's damage to the brand's safety reputation appears to be difficult to ignore.

Earlier this year, Tesla Motors received a 5.4 out of 5 in a crash test safety rating from the National Highway Traffic Safety Administration, making it the safest car in the history of the NHTSA.

Editor's Note: Do You Support Obamacare? Vote in Urgent National Poll

Related stories:

Tesla Outsells Porsche, Other Luxe Cars in California With Model S

Consumer Reports Gives Near-Perfect Score to Tesla Model S

© 2014 Newsmax. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Send me more news as it happens.
 
 
Get me on The Wire
Send me more news as it happens.
Around the Web
 
Email:
Retype Email:
Country
Zip Code:
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved