Tesla Inc. in survival mode, as stock value drops $8.8B - Bend Bulletin

Bulletin wire reports

Elon Musk’s growth story is looking more like a fable as Tesla Inc. enters survival mode.

Just over two weeks ago, Musk boasted to stock analysts and big investors that the company was on course to reach half a trillion dollars in market value. Since then, Tesla’s stock price has dropped 19.5%, vaporizing $8.8 billion in market value.

The remaining $36-billion market capitalization is 7% of what Musk is telling the world Tesla will be worth.

On Friday, Tesla’s stock price dropped below $200 a share for the first time since December 2016. On Monday it fell as much as 7% before finishing at $205.36. The spark was provided by Dan Ives, an analyst at Wedbush Securities, who was once an enthusiastic Tesla supporter.

The company on Monday cut $3,000 from the price of the Model S sedan and $2,000 from the Model X SUV.

Tesla said in a statement that it periodically adjusts prices and available options like other car companies. The decreases offset price increases from a month ago when Tesla offered longer battery range and added a new drive system and suspension. The statement didn’t say if slowing sales influenced the decision.

The Model S now starts at $71,250 while the X starts at $71,950. Both prices don’t include federal and state tax credits.

Ives called Tesla a “code red” situation. “We have continued concerns around Tesla’s ability to balance this ‘perfect storm’ of softer demand and profitability concerns, which will weigh on shares until Musk & Co. prove otherwise in terms of delivering solid results over the coming quarters,” Ives wrote, referring to CEO Elon Musk.

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