Tesla Turns Negative Despite Musk Talking up Chances of Record Quarter

Tesla Turns Negative Despite Musk Talking up Chances of Record Quarter

Tesla Turns Negative Despite Musk Talking up Chances of Record Quarter
Stock Market
Wednesday, June 12, 2019 - 18:41

Investing.com -- Tesla shares turned negative on Wednesday, even as CEO Elon Musk touted a possible record quarter could be in play for the electric automaker.

At the company's annual meeting on Tuesday, Musk said Tesla had a “decent shot" at delivering a record quarter on every level and railed against claims that automaker had a demand problem.

"I want to be clear: There is not a demand problem," Musk said. "Sales have far exceeded production, and production has been pretty good so we’re actually doing well."

But Tesla (NASDAQ:TSLA) fell 2.7% to $211.14 after hitting a session high of $223.37, with traders seemingly taking profits in automaker's stock, which rose more than 15% in June through Tuesday in the run up to the shareholder meeting.

Some of selling was also attributed to company's lack of emphasis on returning the company to profit, with Musk warning last night that "profitability is always challenging when you're a fast-growing company."

In late April, Tesla guided for a second quarter net loss and a return to profitability in the third quarter.

Wedbush analysts Daniel Ives and Strecker Backe said Tesla's profitability "remains a hot button issue of the Street in light of the softness seen in the March quarter and the recent capital issue." In early May, Tesla raised about $2.7 billion in the sale of stock and notes to bolster its cash reserves.

In addition, proposals to reduce board terms and give stockholders a greater voice in company matters failed at the annual meeting.

© Reuters.
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