Tesla Stock: Company Shares Up this Morning Despite Elon Musk Spiral

Florence Fletcher
September 12, 2018

Tesla is adopting a tried-and-true approach to speeding up production: fewer colors. With the Model 3, production hit 7,000 cars a week in July after a shutdown led to improved automation before the production line switched to 24/7.

In addition to being a pinch point slowing production, Tesla owners have taken to online forums to cite an unusual number of paint-quality and rust issues with their new Model 3s.

Shares of Tesla are down 14% since the start of this year.

Tesla Inc (TSLA.O) will eliminate some color options for its electric cars to streamline production, Chief Executive Officer Elon Musk tweeted on Tuesday, as the company intensifies its efforts to ramp up production.

In a note to clients on Tuesday titled "No Longer Investable", Nomura Instinet analyst Romit Shah said that while Nomura has been one of the most bullish on Tesla's stock since it initiated coverage last October, the controversial behavior of Tesla's chief executive is recent months has hurt the company and likely contributed to the senior management exodus. The waiting list for a Model 3 is more than 400,000 strong, and some people have been waiting since March 2016.

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Alliance Bernstein analyst Toni Sacconaghi, Jr said much of the pressure on Tesla shares over the last month has been due to the sense Musk is "running wild and can't be contained" following a patch of erratic behavior, including a podcast appearance Thursday night in which he smoked marijuana.

Later on Friday, Tesla named a new president of automotive operations, promoting eight-year Tesla employee and former Daimler truck exec Jerome Guillen into the role overseeing all automotive operations and reporting to Musk.

Tesla now offers seven colors for its vehicles that include top variant Model S, mid level Model X and its most affordable sedan Model 3.

With Tesla's stock falling to its lowest level since April, short-sellers added 810 000 shares to their positions, bringing the total as of Thursday to about 32.6 million shares, according to S3 Partners, a financial technology and analytics firm. Over half a million individuals worldwide reserved the Tesla Model 3, and the all-electric vehicle manufacturer was not ready for that volume of demand. So, Tesla stock is receiving contradictory opinions, to say the least. The Motley Fool owns shares of and recommends Tesla.

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