It’s a beautiful trifecta for Tesla this evening, provided you are short. I have no position.

MarketWatch reports Tesla stock falls even farther after recall of 123,000 Model S cars.

Tesla Inc. finished off its worst month in seven years with the news late Thursday that the electric-auto maker is recalling 123,000 Model S vehicles due to a potential flaw in a power steering component.

Investors continued to punish Tesla in after-hours trading, with the stock more than 3% in the red, giving back the day’s regular-session gains of 3.2%, when it closed at $257.50. Tesla stock is down 23% in the past month, as the S&P 500 index SPX, +1.38% has fallen 4%. Markets are closed Friday in observance of Good Friday.

The recall of the Model S vehicles is due to a bolt that could corrode, an issue that occurs in cars built before April 2016, and in winter conditions where roads are frequently salted, the company said. Just 0.02% of the cars ever experience the problem, Tesla said.

It’s a small percentage of cars involved in the recall, but it will prove to be costly to a company already struggling to stay afloat.

Bonds Ouch!

Tesla bonds…ouch. The current implied yield of nearly 7.7% on Tesla 2025 debt is unsustainably high for the company, which needs to raise several billion dollars by the beginning of next year to remain viable: Bloomberg Intelligence’s @JoelLevington1

— Lisa Abramowicz (@lisaabramowicz1) March 28, 2018

Credit Rating 

$TSLA Once you slip one more notch, no one will touch you.

— BossHogg (@BossHoggHazzard) March 29, 2018

Fraudulent Conveyance Lawsuit 

Going back to my bk practice days, +1 way 2?@ $TSLA shape is 2test if it’d meet def. of “insolvent” under 11 USC 101 & 548. My guess is that if answer is not a “yes”, it wud be VERY close. Btw we may see that play out if/when SCTY b/out is challenged as a fraud conveyance

— FZucchi (@FZucchi) March 29, 2018

Print Friendly, PDF & Email