Is Tesla’s Stock Experiencing a Shock?

http://www.latimes.com/business/autos/la-fi-adv-hy-tesla-shares-20151012-story.html

Tesla Motors was once the most favored stock on Wall Street. I mean, why wouldn’t it be? It’s the future of driving, its technology is an attempt to save the world and honestly, people have never seen anything like these vehicles. So, why are investors turning bearish as the company’s stock slumps? And, why is the company’s stock slumping in the first place? Well, Tesla’s current financial situation could be due to several elements.

First, the company recently launched its first crossover SUV. Normally, when a company launches a new product, their stock share prices rise. However, the Model X launch was not exactly impressive. For example, the car’s price was higher than promised, therefore, several customers ended up canceling their orders. This kind of situation causes customers to lose trust in a company, which ultimately leads to a decrease in share price.

Second, Tesla missed its guidance to investors about how many cars it will deliver this year. The year is almost over and the automaker has delivered only 33,117, when they promised to deliver 50-55,000 cars this year. This serves as another example of a promise not met by the technology company.

Overall, Tesla needs to get their stuff together in order to survive as a company. With such a cool concept, a team of genius engineers and a trusted brand, Tesla Motors has the power to essentially take over the car world. Hopefully, this financial slip is purely temporary.

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