Tesla CEO Elon Musk is probably trying to figure out what he has do to get on Wall Street’s good side.
After Tesla reported an impressive third-quarter for vehicle deliveries — 24,500 vehicles, with another 5,500 in transit — on Sunday, shares moved higher.
At one point, $215 was in sight.
But by Friday’s market close, the stock had dived around 9% from earlier trading-day peaks, finishing up at $196.61.
The slide was intensified when Goldman Sachs downgraded Tesla and dropped its target price to $185 from $240.
Goldman analyst Patrick Archambault has never been a major Tesla bull — his calls have typically been in the middle of the pack, between the uber-bulls who have suggested that the stock going to $450, and the uber-bears who think it will crash to $100 — but the market is making him look like genius now.
The key issue for Tesla now is that it will likely need to raise another round of capital soon, and Q3 deliveries were its main stock-price booster going into the end of the year.
The carmaker will report Q3 earnings at the end of October, and unless Tesla expects a massive reversal of previous quarters, a loss is likely. This will put a huge amount of pressure on Q4 and full-year deliveries.
But even if Tesla hits the low-end of its guidance — as it has for the previous two years — and delivers around 80,000 vehicles, chances are good that the stock price will continue to endure, at worst, some serious pain, and at best a return to the volatility that has characterised the company’s shares for years.
Business Insider Emails & Alerts
Site highlights each day to your inbox.