Tesla Motors stock plunges to 52-week low after fatal Model X crash
The shares of the Silicon Valley-based electric-car manufacturer Tesla Motors plunged to a 52-week low this week, with the freefall of the company’s stock continuing on Wednesday.
The alarming drop in the previously high-flying Tesla stock is largely a result of the last-week fatal crash involving a Model X, as well as questions being raised about the company’s recent move to increase the production of Model 3. Investors have been worried for the last few quarters about Tesla’s ability to deliver on its promise.
As the company faced production bottlenecks, CEO Elon Musk has mentioned that Tesla Motors will do everything to deliver Model X cars to clients who have booked the electric vehicle. While some investors have sold the stock during the current downturn, others are considering it as a buying opportunity. Tesla stock price will mainly depend on Model 3 deliveries and Musk has earlier indicated that he is closely working with his team to improve vehicle deliveries.
As compared to the high valuation which the Tesla stock achieved on September 18, 2017 when it hit a peak of $389.61 a share, the recent freefall of the company’s shares has led to a significant drop in its market capitalization, to the tune of approximately $20 billion.
With Tesla’s shares presently spanning a bull and bear territory and trading down more than 17% since the beginning of 2018, Morgan Stanley analyst Adam Jonas as well as some other Wall Street analysts are of the opinion that the recent slump in Tesla shares has unfolded a great opportunity for buying the shares.
In a Wednesday note to clients, Jonas said that Morgan Stanley believes that it is “looking at one of the buying opportunities that many investors have been waiting for,” and added that any further fall in Tesla shares would offer “an opportunity to build an Equal-weight position in the stock.”
New plans related to production of Model 3 have surprised parts makers. The automotive company has planned to launch its Model 3 by 2018, which is two years prior to what earlier was decided.
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