Tesla jumps as investors shrug off China recall

Shares of Tesla jumped as much as 3% in trading Monday, peaking at $US309.43, recouping some of their steep losses from recent weeks as investors seemed to shrug off a 9,000-vehicle recall in China.

The Chinese government’s quality watchdog said Monday that Tesla will recall a total of 8,898 Model S cars that have been in the country since June 28.

Monday’s gains bring Tesla back above the key $US300 resistance level, but still in the red for the past month. The stock has been smoked in recent weeks after yet another delivery miss, plunging bond prices, and a fatal autopilot crash in California that killed the driver of a Model X.

Tesla has also hired a former Obama administration official, Alexandra Veitch, as North American head for government relations and policy, Politico reported Monday. Her expertise will likely come in handy as the company faces an NTSB investigation into the deadly California accident.

Shares of Tesla are down 4.24% since the beginning of the year. The stock has received a number of downgrades amid the flurry of negative press, yet Wall Street maintains a relatively bullish outlook, with an average price target of $US330, according to Bloomberg.

“We see Tesla as a great company led by a true visionary, but must acknowledge the asymmetric risk/reward profile for the stock at the market’s current valuation,” Cowen analyst Jeff Osborne said in a note to clients last week. “Simply, we see a lot more that can go wrong than can go right as the company transitions into Mr. Musk’s greater vision as laid out in his Master Plan, Part Deux.”

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