Tesla: Day Of Reckoning Near?

By Tyler Durden

Authored by Tom Lewis via GoldTelegraph.com,

Tesla is having a disastrous month. Following the fatal accident which involved a Tesla vehicle on autopilot, numerous companies have come out and suspended autonomous driving programs. Shares of Tesla have plummeted 22% in March as the company also experienced a credit rating downgrade.

Morgan Stanley on Wednesday came out and warned Tesla shareholders that this freefall could only be the beginning…

Analyst Adam Jones warned:

A lower share price begets a lower share price … For a company widely expected to continue to fund its strategy through external capital raises, a fall in the share price can take on a self-fulfilling nature that further exacerbates the volatility of the share price

Jones went on to say that the company must increase production for its model three if the company wants to raise capital at an attractive valuation, as he continued:

The precise timing of when Tesla can achieve a 2,500/week and then a 5,000/week production run-rate for its mass market sedan can make the difference between whether Tesla is potentially raising capital from a position of weakness at a price near our $175 bear case or whether it can access capital from a position of …read more

Source:: ZeroHedge