No Joke: Tesla Stock Drops After Elon Musk Jokes About Bankruptcy
Tesla Inc. stock dropped more than 7% on Monday morning as the maker of electric cars comes out of a week of bad news -- including a big recall of Model S cars and an investigation into a fatal crash of a Model X SUV -- and investors expect the company will announce disappointing delivery numbers for its Model 3
Tesla shares were down 7.5% at $246.11 around 8 a.m. PDT. They have sunk more than 20% this year.
Chief Executive Elon Musk made light of Tesla's troubles, tweeting an April Fools' joke on Sunday that the Palo Alto company had gone "completely and totally bankrupt" despite efforts to raise money, "including a last-ditch mass sale of Easter eggs."
"There are many chapters of bankruptcy and, as critics so rightly pointed out, Tesla has them *all*, including Chapter 14 and a half (the worst one)," Musk tweeted Sunday.
He followed up that tweet with one showing a staged photo of himself against the side of a vehicle, surrounded by a cardboard box that read "Bankwupt!" written in black marker. The text accompanying the photo read: "Elon was found passed out against a Tesla Model 3, surrounded by 'Teslaquilla' bottles, the tracks of dried tears still visible on his cheeks."
The joke did little to quell investors' concerns.
On Tuesday, the National Transportation Safety Board said it would investigate the fatal crash of a Model X SUV in Northern California. The vehicle hit a highway barrier near Mountain View on March 16 and then caught fire. Tesla said later in the week that the car's semiautonomous Autopilot feature was engaged at the time of the crash and that the driver had his hands off the wheel for six seconds.
An NTSB spokesman said Monday that the agency is "unhappy with the release of investigative information by Tesla." The agency said its next update will come in a preliminary report, which generally takes weeks.
And on Thursday, Tesla said it was recalling all Model S sedans built before April 2016 -- about 123,000 cars -- after observing "excessive corrosion in the power steering bolts." The company did say in an email to affected customers that the problem occurred only in "very cold climates," particularly in localities that use magnesium or calcium road salts to clear roads of snow.
This week, the automaker is set to report production figures. An internal memo to Tesla factory workers, first reported by Bloomberg, last week asked for volunteers to come off the Model S and Model X production lines to help out with Model 3 production and disprove the "haters" betting against the company.
Tesla had a goal of assembling 2,500 Model 3s a week by the end of March. But the automaker has repeatedly fallen short of its production goals.
© 2018 Los Angeles Times under contract with NewsEdge/Acquire Media. All rights reserved.
Image credit: iStock/Artist's concept.
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