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Tesla’s Stock, Bond Price Sink
Tesla Inc.’s stock price has skidded 7% to less than $281 in the past two days, and the company’s $1.8 billion junk bond dropped to a record low of 86 cents on the dollar.
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Tesla Inc.’s stock price has skidded 7% to less than $281 in the past two days, and the company’s $1.8 billion junk bond dropped to a record low of 86 cents on the dollar.
The company’s shares have lost about 25% of their value since early August, when CEO Elon Musk floated the idea of taking the company private.
Analysts attribute this week’s decline to two factors. One was Mercedes-Benz’s unveiling of its first electric SUV, which will become a direct competitor to Tesla’s Model X when it goes on sale next year. Tesla has had that market to itself to date.
The second hit was caused by Musk’s revival of a feud with a British diver who helped rescue a youth soccer team from a flooded cave in Thailand in July. Musk accused diver Vernon Unsworth of being a pedophile after he rejected as unusable a tiny rescue sub developed by Musk’s SpaceX rocket company. This week Musk described Unsworth as a “child rapist” in an email to BuzzFeed News, according to the news service.
Musk’s attacks against Unsworth, coupled with his abrupt reversal about privatizing Tesla, have renewed investor worries about his judgment and the ability of the company’s board to control his actions.
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