Tesla (NASDAQ:TSLA) sank to a 2-year low after CEO Elon Musk told employees that effective immediately he and the fledgling EV maker’s new CFO will be scrutinizing every dollar the company spends in a “hardcore” focus on costs. Almost laughable if not so futile attempt to stop the bleeding there.
In an e-Mail to staff, Musk said it was extremely important to examine “every expenditure at Tesla, no matter how small, and be sure that it is critical.”
He underscored the company’s $700-M Q-1 loss and said that even with more than $2-B of cash on its books, it “actually only gives us approximately 10 months at the Q-1 burn rate to achieve breakeven!”
Tesla, which earlier this month raised $2.35-B through debt and stock offerings, has received some intense criticism from investors and analysts alike for the first-quarter loss.
Friday’s 4.9% slump in the shares (NASDAQ:TSLA) pushed the decline this month to 14%. The stock has been among the hardest hit by lessened demand world wide for its cars.
China, which is one of the biggest auto markets in the world and has strong demand for EVs, is thought to be a Key area of focus for Tesla, but the Chinese make their own EVs and Tesla’s cars are considered luxury status symbols and the demographic is very narrow.
Earlier this year, the company broke ground on a battery and vehicle factory on the outskirts of Shanghai and according to Mr. Musk, ‘could’ be making as many as 2,000 cars a week by the end of Y 2019. Could is the controlling word and not likely, as will many if not all of Mr. Musk’s hype.
HeffX-LTN’s overall outlook for TSLA is Very Bearish across the board, there is no support of the stock, our call is 140 then 75 then bankruptcy.