A few developments that would have knocked most stocks off course are barely registering among Tesla’s bullish crowd.
Late Friday, it was reported that Tesla had fired hundreds of workers. Though the company maintained that the firings were related to annual performance reviews and mostly on the administrative and sales sides, the article from the Mercury News noted that “engineers, managers, and factory workers” were let go.
Model 3 production is apparently going better now, according to Oppenheimer analyst Colin Rusch, who recently met with Tesla’s management.
“Tesla indicated that all the production equipment for Model 3 was installed and working and that all vehicles were moving through the manufacturing line,” he writes, in a likely nod to a recent Wall Street Journal report saying that parts for the early Model 3s were being produced by hand. He adds that “we understand the delayed ramp is due to a small number of suppliers failing to deliver on time.”
Even so, Rusch is now projecting even bigger losses for Tesla this year. He lowered his estimates for the company’s adjusted loss per share to $7.02, from $4.95 previously. That’s a 42% difference, but investors don’t seem to care all that much. Tesla’s big valuation is built around hopes for the future; losses today are but a course correction for Tesla’s ardent bulls.
As of Monday afternoon, Tesla shares were down 1% on the day.
Big Picture: Reports of firings at Tesla, plus an analyst’s projection steeper losses this year, sent the company’s shares down a bit on Monday.
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