Tesla Stock Falls At Job Cut, Profit Concerns
Tesla (TSLA) CEO Elon Musk on Friday announced that he is reducing 7% of the company's workforce, which is equivalent to 3,100 plus jobs.
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In an email to employees, Muske said that Tesla faces an "extremely difficult challenge" to make the cars, batteries and solar products cost-effective with fossil fuels. He said earnings in the fourth quarter are likely to be lower than last quarter.
"As in the third quarter, shipments of more expensive model 3 variants (this time to Europe and Asia) will hopefully allow us, with great difficulty, effort and some luck, to target a small profit," says Musk. [1[ads1]9659004] Tesla plans to deliver model 3 cars to customers in China in March, and is close to getting approval to start deliveries to Europe.
Tesla shares fell 13% and ended on the stock market today at 302.26.
Knee-Jerk reaction to Tesla Stock
"The trick reaction to this morning's blog post will clearly be negative from the streets perspective, as there will be More questions than answers to the company formally reporting revenue / guidance in early February, continues Wedbush analyst Daniel Ives in a note to clients.
"Having said that, while headwinds abound on a number of different fronts, we continue to believe Tesla will be able to come up with a stronger, profitable, more product-diversified electric car company over the next 12 to 18 months, helping to lay the foundation for Model 3 as a progress for growth ahead, he continued.
Ives rated better than Tesla's share and price target of 440.
Tesla has not yet announced a reporting date for the fourth quarter earnings. Tesla quarterly delivery numbers for the fourth quarter that were not analyzed estimates
The company announced the third quarter results in October, showing a surprising profit, only the third profitable quarter in the electric car manufacturer's 15-year history.
Musk left blank the exact In an October tweet, Musk said Tesla had around 45,000 employees, a 7% cut amounting to 3,150 redundancies at that rate. The company has added several employees since it hit the Model 3 production.
Key figures Reduction was expected
Analyst Philippe Houchois estimates that Tesla will drop between 3,200 and 3,500 people.
"Lower reduction was not unexpected," Houchois wrote in a note to clients. "Heading reduction is part of the process of reducing model 3 price points with the lowest battery and counteracting the reduction in US federal tax credits."
Houchois maintained a purchase rating on the Tesla share and a price target of 450. [19659004] YOU CAN ALSO LIKE:
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