Tesla Inc (NASDAQ: TSLA) is a hot topic in the market today, and for good reason. The troubled company had two big pieces of news released today.
The first bit of news surrounded deliveries of vehicles in the first quarter. Unfortunately, the company missed the mark, leading to widespread concerns.
Moreover, Elon, CEO at TSLA, faced the SEC in a contempt hearing today. While the court kept Elon Musk safe for now, we’re likely to see quite a bit of news from Tesla and the SEC regarding the case over the next two weeks. Here’s what’s happening:
TSLA Deliveries Miss The Mark
The first upset of the day today came when Tesla announced its vehicle deliveries for the first quarter. Overall, deliveries in the quarter came in at about 63,000. That figure was a far cry from the 72,000 deliveries that the company was expected to report.
A big part of the miss had to do with the Model 3. During the quarter, it was expected that 58,900 Model 3 vehicles would be delivered. This figure was already accounting for a decline in deliveries. Unfortunately, TSLA missed the mark in a big way, delivering only 51,000 Model 3 vehicles in the quarter. The problem here is that the company needs to see high volumes of Model 3 sales. If not, operating profits will take a hit.
In the report, Tesla reiterated its guidance with regard to vehicle deliveries. The company expects that for the full 2019 year, it will deliver between 360,000 and 400,000 vehicles. However, investors aren’t convinced after the company’s painful miss in the first quarter.
Judge Keeps Musk In The Clear… For Now!
In another big story hitting the tape today, Elon Musk, the CEO at TSLA appeared in court today regarding a contempt case. Recently, the SEC sought for Musk to be found in comtempt after announcing in a Tweet that the company would deliver 500,000 vehicles in 2019. Hours later, he retracted the statement, announcing that the deliveries would be more like 400,000.
The SEC says that these tweets violated a settlement it reached with the company in the wake of tweets about a takeover bid that proved to be non-existent. As part of the settlement, Musk’s tweets were supposed to be reviewed and approved before being released. That proved not to be the case with the 500,000 vehicle delivery tweet.
In court today, Judge Alison Nathon ordered lawyers for Elon Musk and the SEC to discuss a resolution and come back in two weeks. This conversation keeps Musk in the clear for now. However, unless lawyers for the CEO of TSLA and the SEC can reach an agreement, Musk could be ordered to step down from his position as the CEO of the company. Although, many suggest that Judge Alison Nathan isn’t likely to rule this harshly.
TSLA Stock Had An Appropriate Reaction To The News
With dark clouds hanging over Tesla in the media this morning, it was expected that the company’s stock would shed a bit of value today. That’s exactly what we saw.
By the close of the trading session, TSLA was trading at $267.86 per share. Throughout the day, the stock dropped $24.03 per share or 8.23% of its value as investor concerns about weakening deliveries and a potentially painful outcome of the SEC v. Musk case grew.
Where Do You Think TSLA Is Headed?
Where do you think TSLA is headed? Join the discussion in the comments below!