(Bloomberg) – Tesla Inc. shares doubled below $ 200 for the first time in more than two years, with the automaker facing a "Kilimanjaro-like uphill climb" to hit profitability targets in the second half of the year. 19659002] In a note Sunday, Wedbush analyst Dan Ives described the electric car manufacturer's difficulty as a "code red situation" and cut its price target on the stock to $ 230 from $ 275. Ives slashed their goal from $ 365 just last month.
Tesla shares fell as much as 7.5% to $ 195.25 and traded at $ 200.68 from 11:30 am Monday in New York. The stock closed at the lowest level for almost 2 1/2 years on Friday after Musk demanded a "hardcore" review of all of the company's expenses and an analyst warned of potentially serious fallout from a deadly crash involving Autopilot.
Tesla only delivered 63,000 cars in the first quarter, but expects to deliver 90,000 to 100,000 cars in the second quarter and 360,000 to 400,000 for the year. Ives said it was a more likely scenario to hit the full-year target, and it would look at 340,000 to 355,000.
Representatives of Tesla did not immediately respond to requests for comments.
Tesla's 5.3% bond due to 2025 now gives approx. 8.9%, according to Trace, well above the average return for a B-rated company. The bonds have tightened the broader Bloomberg Barclays Single B US High Yield Index this year by around 500 basis points, according to analyst Bloomberg Intelligence Joel Levington.
"There is little in terms of favorable credit catalysts to turn the momentum around the near term," Levington said in a report Monday. The bond price fell below 83 cents for the first time on an intraday basis, making security the biggest loser in the high yield market on Monday, according to Trace.
Tesla's CEO Elon Musk recently told employees in an e-mail that he and CFO Zachary Kirkhorn will personally examine expenses after a poorer than expected loss in the first quarter. After paying a $ 920 million cash convertible bond in March, another $ 566 million will accrue in November.
By the drum of interest for stock and debt supplier earlier this month, Musk placed investors on a future for autonomous robot stocks as the key to Tesla becoming a $ 500 billion company. The market value is now less than $ 36 billion, requested by General Motors Co. and Ford Motor Co.
If Tesla can't profit in the second half, the company may have to raise another $ 1 billion to $ 2 billion of capital, Ives said in an interview with Bloomberg Television.
"With a code red situation at Tesla, Musk & Co. is expanding to insurance, robotaxis and other sci-fi projects / endeavors when the company is instead to be laser focused on increasing the core requirement according to model 3 and simplifying the business model and The cost structure, Ives wrote in his report.
(Updates with charts by fourth paragraph.)
– With help from Yan Zhang, Gabrielle Coppola, Jonathan Ferro and Molly Smith.
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To contact the editors responsible for this story: Craig Trudell at ctrudell1 @ bloomberg. Net, Young-Sam Cho on ycho2 @ blossoms berg.net, Chester Dawson
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