Elon Musk saw a few billion of his wealth vanish as shares of Tesla Motors Inc (NASDAQ:TSLA) stock lost 44% over the past one-and-a-half years.
The billionaire’s 22% stake in the electric carmaker was worth $4.6 billion on Friday, compared to more than $8.0 billion in September 2014, when the stock hit an all-time high of $286.00.
On Friday, Tesla shares touched $157.74, their cheapest intraday price since January 2014. The stock was down 10% as of 2:15 p.m. on Friday.
Musk at present owns slightly more than 28.9 million TSLA stock shares. (Source: “Elon Musk exercises Tesla options, pays $50 million tax bill with own cash,” MarketWatch, January 30, 2016.)
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This fresh slump comes on the heels of mostly negative reports from analysts and a few days before the Palo Alto, California-based company reports fourth-quarter earnings.
In a note to clients on Monday, Morgan Stanley’s Adam Jonas predicted lower volumes for Tesla’s newest vehicle, its “Model X” SUV. Jonas, who is a known Tesla Motors Inc. bull, dropped his overall 2016 delivery volume forecast to just over 70,000 vehicles, including 56,000 “Model S” cars, an increase from 53,000, and 15,000 Model X cars, lowered from 18,500.
“We understand our forecasts for Model X volume are well below (Wall Street) expectations—a position we believe is appropriate until Tesla can provide greater assurances and proof that it can manufacture and deliver this model at high scale and with high quality,” Jonas wrote in the note. (Source: “Tesla to make fewer Model X vehicles, Morgan Stanley says,” MarketWatch, February 1, 2016.)
Low demand for electric vehicles in a $30.00-a-barrel oil environment has also prompted the investment bank to cut volume assumptions for the “Model 3.” West Texas Intermediate (WTI) futures were up 1.8% at $31.44 a barrel on Friday.
Tesla, however, is expected by analysts to report adjusted fourth-quarter earnings of $0.17 a share, which would contrast with adjusted losses of $0.13 a share in the year-ago period. Such earnings would end Tesla’s streak of four consecutive quarterly losses.
Analysts also expect Tesla to report revenue of $1.84 billion, up from $1.1 billion a year earlier.
Skittish investors will be closely watching the company’s cash flow expectations and whether it will go back to capital markets this year.
Tesla plans to take orders for the Model 3 in March and expects to begin battery-cell production at its “Gigafactory” plant in Nevada in 2017.
Analysts believe the company needs to produce cheaper, more plentiful batteries to be able to sell the Model 3 at a lower price point and in larger numbers.
TSLA stock has seven “Buy,” nine “Hold,” two “Underperform,” and three “Sell” recommendations from analysts, who, on average, offer a 12-month price target of $280.00. (Source: CNN Money, February 5, 2016).