Daily Digit: Tesla stock value down by $7 bln on fires
Friday, November 08, 2013 - 00:59
Nov 8 - $7 billion in market cap has been wiped away for Tesla as the Wall Street darling deals with its third fire in six weeks and disappointing third-quarter results. Conway G. Gittens reports.
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Tesla shareholders are experiencing a bit of whiplash.
Some $7 billion in market value has evaporated since late September, with the stock on track for its worst one-week decline in well over a year.
A public relations problem is brewing with Tesla's third electric car fire in six weeks. Growing adoption of the luxury Model S is at the heart of Elon Musk's strategy to take on the traditional car market.
But that strategy is under scrutiny even without those fires. Tesla's third quarter results showed the company is having trouble keeping up with demand because it can't get enough of the lithium-ion batteries that power the vehicle...the same batteries by the way, which could become part of safety investigations after those three fires.
Analysts have been quick to defend the company and the stock, but with shares posting a year-to-date rise of just under 300 percent, some nervous investors are willing to take some money off the table.
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