Tesla loaded up on debt to speed the company's rapid rise in the auto world. Even if it was live on television, Elon Musk's marijuana episode at the weekend was just one of several weird decisions that have rattled investors in the United States electric carmaker.
Shares of the company, which closed up 8.5 per cent at $285.50 on Monday after two brokerages said it could meet its production targets for the second half of the year, fell almost 2 per cent before the bell on Tuesday.
Now, two and a half years later-despite Model 3's frequent production hiccups-Tesla is surprisingly on track to achieve that goal Musk set in 2015.
Tesla is "no longer investable", Shah said.
Sacconaghi noted that while the latest sell-off reflects potential risks from lawsuits, Musk's "increasingly erratic" behavior, competition in the electric vehicle (EV) space and high management turnover, "it is unclear to us that any of these are deal breakers for the stock".
On August 1, Musk told analysts that Tesla plans to pay off its debt instead of refinancing it. Musk has also shot down speculation that Tesla will need to raise cash by selling more stock. The fiasco reportedly sparked an SEC investigation into the accuracy of Musk's "funding secured" tweet.
There was Musk's botched attempt to take the company private. "We believe Tesla could consider an auction for its shares in the private equity market, financed by existing shareholders, new strategics, divestiture of valuable captive assets (Tesla autonomous/shared), and possibly some help from SpaceX". It missed several deadlines to produce 5,000 of its mass-market Model 3 cars per week but reached that milestone earlier this summer.
Tesla's shares plunged 6.3 percent to a five-month low after the electric vehicle manufacturer revealed that its chief accounting officer has resigned within less than a month after he started out on the job.
It may no longer be up to Musk.