Following a pessimistic report by CapStone Investments
analyst Carter Driscoll, in which he rated Tesla Motors Inc. as a
"sell", investors went on a mini-selling spurt, depressing the
electric vehicle maker's shares to around $25.20 -- a drop of 21 percent.
Mr. Driscoll comments, "Right now the risks outweigh
positives."
The big drop was followed by a slightly recovery, as shares today have
climbed to around $26.20. Concerns about the EV maker's fate are far from
over, though.
Tesla is racing to try to introduce its Model S mass-market electric vehicle, an
entry-level luxury vehicle that will be priced at approximately $57,000 USD
before any applicable tax credits. With tax credits, the vehicle's price
could dip to $50k or less.
The company is hoping to deliver the vehicle in just over a year --
with the first orders being delivered sometime in early 2012. The
vehicles, assembled at what used to be Toyota's NUMMI plant in California, will be
able to travel 300 miles on a charge. Tesla is
also targeting sportier performance than its established foes, which include General Motors, Ford, and Nissan.
The investment required to developed the advanced vehicle is immense
and has caused the company to once again become unprofitable, despite shipping modest numbers
of its current-generation Roadster EV. With
founder and CEO Elon Musk already cash-strapped from his investments in his
other company -- Space X -- it remains to be seen whether the
company has enough charge in its packs to reach its destination.
Nonetheless,
the share price still indicates cautious optimism, as the IPO price was $17, meaning that the current
share price is at a premium of approximately 55 percent. Monday's
drop-off was similar to that in recent months of networking giant Cisco, who
similarly suffered from unfavorable analyst reports.