Tesla stock and bonds tumble as investors fret about costs and safety

Tesla's stock tanks after analyst blasts Musk's 'sci-fi projects'

Tesla's stock tanks after analyst blasts Musk's 'sci-fi projects'

Tesla's stock and bonds tumbled on Monday as investors anxious about the automaker's cash burn, sales outlook and problems with an Autopilot system that CEO Elon Musk has held out as key to the electric carmaker's future.

Shares of Tesla were down 4.2 percent at at noon on Monday, sitting at $202.13. But after the March 1 crash of a Model 3 using Autopilot, some analysts are questioning Tesla's ability to bring a fully autonomous auto to market by next year, as Musk has previously stated.

In an emailed statement, a Tesla spokesperson said its vehicle logs from the crashed auto indicated that the driver first engaged Autopilot 10 seconds before the accident and then "immediately removed his hands from the wheel", adding that "we are deeply saddened by this accident and our thoughts are with everyone affected by this tragedy".

Earlier in the session, Tesla sank below $200 for the first time since December 2016.

"We believe that the NTSB report could cast doubt on TSLA's self-driving capabilities, which have been highly touted by Mr. Musk", Needham analyst Rajvindra Gill wrote in a note to clients on Monday.

Tesla's stock is down 39 percent year to date, with a large chunk of that decline coming after the automaker went back to the well for another round of financing on May 2.

Ives, who has been generally bullish on Tesla's future, likened the scenario to a "red-code situation" and cut his price target on Tesla's stock to $230 a share, from $275. Ives, once among the most bullish analysts covering Tesla, wrote in a client note that he had "major concerns" about the company's growth prospects, underlying demand for the Model 3 in the USA, and path toward profitability. After having to pay off a $920 million convertible bond with cash in March, another $566 million is due in November. Its market capitalization is now less than $36 billion, trailing General Motors Co. and Ford Motor Co.

If Tesla is unable to earn a profit in the second half of the year, the company may need to raise another $1 billion to $2 billion of capital, Ives said in an interview with Bloomberg Television. He also questioned Musk's forays into areas like robotaxis and other "sci-fi projects", urging the company to focus on its core business. Its $1.8 billion junk bond was trading at a five-month low of 84.25 cents on the dollar.

"Preliminary data from the vehicle show that the Tesla's Autopilot system - an advanced driver assistance system (ADAS) that provides both longitudinal and lateral control over vehicle motion - was active at the time of the crash", the report said.

Musk is battling to convince investors that demand for the Model 3, the sedan targeted to propel Tesla to sustainable profit, remains high, and that it can be delivered efficiently and swiftly to customers around the world. That decree came down shortly after Tesla posted a first quarter loss in excess of $700 million.

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