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David Paul Morris | Bloomberg | Getty Images

Several Wall Street firms are playing down Tesla's Model 3 production milestone, remaining skeptical over the carmaker's finances and demand trends.

Tesla said Monday it reached its one-week production goal of 5,000 Model 3 cars for the last week of the June quarter. But the company fell short on its second-quarter deliveries by posting 40,740 vehicles delivered versus the Wall Street consensus expectation of approximately 51,000.

Tesla shares fell 7.2 percent Tuesday. The company’s shares declined 2.3 percent on Monday after opening up 5 percent at the beginning of the day’s session.

Reuters also reported on Tuesdaythat Tesla shifted workers from other departments including the Model S production line to meet its Model 3 production target.

Goldman Sachs was not impressed with the company’s announcement and reiterated its sell rating for Tesla shares, noting net Model 3 reservations declined to 420,000 from 455,000 last year.

“Model 3 deliveries did miss our bearish estimates and we see the incremental color on Model 3 net reservations (where the company showed its first declining data point) as incrementally negative,” analyst David Tamberrino said in a note to clients Tuesday.

Tamberrino reiterated his $195 six-month price target for Tesla shares, representing 42 percent downside to Monday’s close.

One Wall Street analyst believes Tesla shares will drop further when the company reports its second-quarter earnings.

“Given the softer overall trend to deliveries and implied negative read-across to 2Q earnings and cash flow, we expect a negative reaction in TSLA shares,” J.P. Morgan analyst Ryan Brinkman said a note to clients Tuesday.

Brinkman reiterated his underweight rating and $180 price target for the carmaker’s shares.

In similar fashion, Citi Research reaffirmed its “neutral/high risk” rating Tesla shares, saying Monday’s production announcement doesn’t significantly change the company’s finances.

“We don’t believe today’s update will settle bull/bear debates about sustainable production/demand, FCF generating ability and the risks tied to Tesla’s balance sheet position,” analyst Itay Michaeli said in a note to clients Monday.

Michaeli reaffirmed his $313 price target for Tesla shares.

To be sure, not everyone on Wall Street is negative on Tesla’s prospects. Nomura Instinet reiterated its buy rating and $450 price target for Tesla shares on Monday.

“Tesla hit its production target of 5,000 Model 3’s in the final week of the quarter, which is an important milestone that we believe reestablishes some credibility and positions the company for profitability in the second half of the year,” analyst Romit Shah said in a note. “That said, we continue to expect TSLA shares to be volatile near term; we see current weakness as an opportunity to further accumulate shares.”

The company's shares are up 8 percent this year through Monday versus the S&P 500’s 2 percent gain.

When asked for comment, a Tesla spokesperson referred to the company's second-quarter vehicle production press release, which said the electric car maker produced 5,031 Model 3 vehicles in the last seven days of the quarter, while also producing 1,913 Model S and X vehicles in the same period.

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Tesla stopped a 'brake and roll' test as it pushed to hit Model 3 goals
Tesla has decided to skip a "brake-and-roll" testing step in the manufacturing of its Model 3 vehicles.
Tesla says it tests the Model 3's brakes and alignment in other parts of the factory, so the tests were redundant.
Shares in the electric vehicle maker plunged by more than 6 percent on Tuesday in mid-day trading.

Lora Kolodny | @lorakolodny

Published 11 Mins Ago Updated 3 Mins Ago

CNBC.com

As it pushed to hit its electric vehicle production targets for the quarter, Tesla decided to skip "brake-and-roll" testing for its Model 3 sedans in its Fremont factory.

The company managed to meet a self-imposed deadline to produce 5,000 Model 3 cars in a week after several quarters of missing its goals.

But Tesla's stock plunged by more than 7 percent on Tuesday. Like other auto makers, the company is facing tariffs that will take effect on Friday. And, yesterday CFRA downgraded the stock from hold to sell, saying the company's "burst" production rate for its Model 3s won't be sustainable.

Tesla characterizes the brake-and-roll tests it recently suspended as redundant. The company told CNBC:

“Every car we build goes through rigorous quality checks and must meet exacting specifications, including brake tests. To be extremely clear, we drive *every* Model 3 on our test track to verify braking, torque, squeal and rattle. There are no exceptions.”

It has not yet said whether or when the tests may be reinstated.

According to Tesla, workers at its Fremont, California factory also conduct alignment checks on the GA3 (or General Assembly 3) line using a system that was designed in-house.

All vehicles have their brakes and alignment tested on-site after they're fully assembled and before they leave the Fremont factory to go to a service or delivery center, the company confirmed.

Tesla has also changed other processes to speed up production. For instance, the New York Times reported, Tesla reduced the number of spot welds use in the Model 3's underbelly by 300, or about 6 percent.

Business Insider first reported on Tesla's decision to skip the "brake-and-roll" testing.

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Originally posted by Opus1:
Geeeez sorta feel sorry for the suckers purchasing their tent cars.

Testing? We don't need no stinking testing...

quote:

Tesla stopped a 'brake and roll' test as it pushed to hit Model 3 goals
Tesla has decided to skip a "brake-and-roll" testing step in the manufacturing of its Model 3 vehicles.
Tesla says it tests the Model 3's brakes and alignment in other parts of the factory, so the tests were redundant.
Shares in the electric vehicle maker plunged by more than 6 percent on Tuesday in mid-day trading.

Lora Kolodny | @lorakolodny

Published 11 Mins Ago Updated 3 Mins Ago

CNBC.com

As it pushed to hit its electric vehicle production targets for the quarter, Tesla decided to skip "brake-and-roll" testing for its Model 3 sedans in its Fremont factory.

The company managed to meet a self-imposed deadline to produce 5,000 Model 3 cars in a week after several quarters of missing its goals.

But Tesla's stock plunged by more than 7 percent on Tuesday. Like other auto makers, the company is facing tariffs that will take effect on Friday. And, yesterday CFRA downgraded the stock from hold to sell, saying the company's "burst" production rate for its Model 3s won't be sustainable.

Tesla characterizes the brake-and-roll tests it recently suspended as redundant. The company told CNBC:

“Every car we build goes through rigorous quality checks and must meet exacting specifications, including brake tests. To be extremely clear, we drive *every* Model 3 on our test track to verify braking, torque, squeal and rattle. There are no exceptions.”

It has not yet said whether or when the tests may be reinstated.

According to Tesla, workers at its Fremont, California factory also conduct alignment checks on the GA3 (or General Assembly 3) line using a system that was designed in-house.

All vehicles have their brakes and alignment tested on-site after they're fully assembled and before they leave the Fremont factory to go to a service or delivery center, the company confirmed.

Tesla has also changed other processes to speed up production. For instance, the New York Times reported, Tesla reduced the number of spot welds use in the Model 3's underbelly by 300, or about 6 percent.

Business Insider first reported on Tesla's decision to skip the "brake-and-roll" testing.

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Tamberrino reiterated his $195 six-month price target for Tesla shares, representing 42 percent downside to Monday’s close.

Brinkman reiterated his underweight rating and $180 price target for the carmaker’s shares.

Michaeli reaffirmed his $313 price target for Tesla shares.

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Originally posted by Peter:


Comment? COMMENT? Are you nuts? What is there to comment on? No one knows. I am going to keep my powder dry.
What REALLY puzzles me is "why this interest in Tesla"? It is only because the far right (you know, the patriots) would LOVE to see Tesla, an Amerfican company, fail. Why? Well because it goes against what the bible says: "Drill baby drill", from that well know biblical scholar Sarah Palin!
Peter

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Investors betting against Tesla are getting killed but not for the reason you may think: Cramer
Tesla seems to be able to weather negative headlines without any substantial decline because there are no "real sellers," CNBC's Jim Cramer says.
While the stock was under pressure Thursday after Tuesday's 7 percent decline, Tesla has gained more than 200 percent in the past five years.
"It's stuck here because there are too many shorts," or those investors betting against the stock, he says.

Matthew J. Belvedere | @Matt_Belvedere

Published 3 Hours Ago Updated 2 Hours Ago

CNBC.com

Tesla seems to be able to weather negative headline after negative headline without any substantial decline because there are no "real sellers," CNBC's Jim Cramer said Thursday.

While the stock was under pressure Thursday after Tuesday's 7 percent decline, Tesla has gained more than 200 percent in the past five years.

The longs, or those investors betting on a stock price increase, are "unshakable," generally supporting the stock no matter what, Cramer said on "Squawk on the Street." "The sellers haven't developed in Tesla."

"It's stuck here because there are too many shorts," or those investors betting against the stock, said Cramer, who said last month that he doesn't make recommendations either way on Tesla because he "can't figure out the valuation."

"You need real sellers" for the shorts to get any substantive downside movement in their favor, he said Thursday, stressing that there's no chance of that happening until the stock loses its "cult status."

Tesla is one of the most shorted stocks on Wall Street.

Even with Thursday's drop, Tesla shares have only lost about 8 percent over the past 12 months in the face of repeated production problems surrounding the electric car maker's new less-expensive Model 3 sedan.

On Thursday, Cramer highlighted the work of Bernstein analyst Toni Sacconaghi, an outspoken bear on Tesla stock.

"People ignore him at their own risk," Cramer said of Sacconaghi, who was cut off by Tesla CEO Elon Musk during May's post-earnings call. Musk called Sacconaghi's question about gross margins "boring" and "boneheaded."

Cramer, the host of "Mad Money," said the Bernstein analyst is asking the right, tough questions of Tesla.

Musk on Thursday sounded off on Twitter at media organizations Reuters, Business Insider and CNBC. Musk accused both Reuters and Business Insider of publishing false or misleading stories. He also suggested CNBC features analysts with poor prediction records.

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the conversation is not political but practical

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Originally posted by Opus1:
Bad companies are shorted as investors and market makers are betting against success. Tesla is one of the most shorted stocks on Wall Street. If you are paying attention, that should mean something...

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Originally posted by Todd Williams:

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Originally posted by Opus1:
Bad companies are shorted as investors and market makers are betting against success. Tesla is one of the most shorted stocks on Wall Street. If you are paying attention, that should mean something...

I think Peter is misinterpreting that statement of "betting against success" to mean "Hoping for failure". That's not the case.

The "betting against success" is nothing more than an objective realization that the company hasn't met its targets and hasn't performed as expected, and taking into account current and forecast market forces, it appears the chances of success are becoming more remote. That's NOT "Hoping for failure".

The problem as I see it is the cult mentality of ignoring the warning signs that would clearly be heeded in the case of the typical public company.

I mean, the very definition of cult mentality is a group that has surrendered normal skepticism when red flags appear, due to the leadership of an unconventional figure head. Being "inside the bubble" in other words.

Peter, regarding ENRON, no I don't have evidence of Musk committing criminal acts. I'm more referring to people willing to suspend skepticism because they believe the leadership is working on a different or higher level of intelligence. I see similarities from that standpoint.

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Originally posted by Opus1:
Todd - I agree. I'm no fan of Jim Cramer but he nailed both points:

1. No one can make heads or tails over Tesla's current valuation. If you look at the fundamentals and fundamentals alone, the stock is maybe a $90 stock - not a $310 stock.

2. The Cult Like following of the zombie investor has limited the downside of the stock. Those attempting to short can't because there are too many zombies holding the stock.

From an investment point of view companies like Tesla are difficult to judge. You have to be a master of mob psychology to play it at this stage. So I hit my targets and I'm out at the moment. The markets are chaotic enough without the mob factor added in.

In regards to your ENRON example - there are certainly ties there. Folks betting on ENRON ignored ALL warning signs and common sense. Same goes with MCI-WorldCom and a litany of other cult stocks. If you lived through the tech sector crash, then you would understand. Investors ignored fundamentals and believed the hype and lost trillions in the process.

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Tesla shares fall after Needham downgrades to sell, citing possible increase in Model 3 cancellations

John Melloy | @johnmelloy

Published 3 Hours Ago Updated 12 Mins Ago

CNBC.com

Tesla shares fell on Thursday after Needham & Co downgraded the stock to sell from hold, citing a possible pick-up in Model 3 cancellations.

"Based on our checks, refunds are outpacing deposits as cancellations accelerate," wrote analyst Rajvindra Gill in the note Thursday. "The reasons are varied: extended wait times, the expiration of the $7,500 credit, and unavailability of the $35k base model."

"In August '17, TSLA cited a refund rate of 12%. Almost a year later, we believe it has doubled and outpaced deposits. Model 3 wait times are currently 4-12 months and with base model not available until mid-2019, consumers could wait until 2020," Gill added.

Tesla shares dropped 2 percent in premarket trading Thursday after the note. The shares were down 8 percent in the last one month through Wednesday.

The company did not immediately return an email for comment.

Earlier this month Tesla ditched reservations and opened up Model 3 sales to anyone for a $2,500 deposit.

Gill also cited slower Model S and X sales, margin pressure, increased competition and valuation in the downgrade.

"We are downgrading Tesla to a sell from hold as we believe the stock is still overvalued despite it falling 16% from its peak set in June 2017," the note stated.