Tesla shares fall sharply for second straight day

Tesla shares fall sharply for second straight day

Tesla shares sank in the US Tuesday trading session, as the US NTSB said it was investigating the fatal crash in California involving a Tesla Model X. Tesla said it was also working to uncover the exact details of what happened during the accident.

Tesla tumbled 8.2 percent, or $25 a share, to close at $279.18, the lowest close in nearly a year, after news of the investigation.

"Tesla's ratings reflect the significant shortfall in the production rate of the company's Model 3 electric vehicle", Moody's analyst Bruce Clark said in the report. The credit rating agency said that Tesla would likely need to raise at least $2 billion in the near term to fund the production of its all-important Model 3 mid-market sedan.

Tesla's share price then tumbled by 8.2 per cent when the news of the investigation came out.

"The company also faces liquidity pressures due to its large negative free cash flow and the pending maturities of convertible bonds ($230 million in November 2018 and $920 million in March 2019)", it added.

Shares of Tesla have bounced back after hitting a 52-week low at $252.10 in intraday trading, now down 6.21% at $261.79 a share. First Republic Investment Management Inc. boosted its position in shares of Tesla by 0.7% during the 3rd quarter.

In last week's accident, it was unclear if Tesla's automated control system was driving the auto. The front end of his SUV was ripped apart, the vehicle caught fire, and two other cars crashed into the rear end.

In 2016, a Florida man died in a Tesla Model S after his Autopilot feature drove the vehicle into a parked truck.




The 38-year-old driver of the Tesla died at a nearby hospital shortly after the crash. "Unclear if automated control system was active at time of crash".

A Tesla vehicle was involved in the accident, and ended up catching fire last week on Friday. Until Tesla is able to safely get those logs from the Model X, it won't be able to understand what happened in the minutes leading up to the crash.

FILE- In this February 4, 2015, file photo, Tesla product specialist Kat Brand explains the control panel on the electric auto at a dealership for the vehicle in Seattle. The safety board will examine the post-crash fire and steps needed to make the vehicle safe to remove from an accident scene, according to a tweet.

Tesla's battery packs are designed so that when a fire occurs, it spreads slowly so people have more time to exit the auto.

The NTSB can make safety recommendations but only NHTSA can order automakers to recall unsafe vehicles or fine automakers if they fail to remedy safety defects in a timely fashion. And that's not good news for TSLA stock, given that Autopilot is one of the key features of Tesla cars. Tesla released the Autopilot mode in 2015.

The fatal crash, in which the driver of the Tesla was killed, involved three cars. Tesla has said all cars now being made at its factory in Fremont, California, including the Model 3, have the hardware needed to one day be fully self-driving. That crash raised questions about the safety of systems that can perform driving tasks for long stretches but cannot completely replace human drivers.

Tesla's bonds dropped 4.5 cents on the dollar to 86.5 cents at 12:02 p.m.in NY, according to Trace, the bond price reporting system of the Financial Industry Regulatory Authority after reaching their lowest price ever earlier Wednesday.

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