Tesla has been experiencing ups and downs in terms of shares. Apparently, the company’s stock price declined at least five percent. In a report from Reuters, this is the lowest the electric car company’s stock sank in two years.
Last week ended with a rough one for Elon Musk’s company. Not only did it include a worse-than-expected quarterly outcome, but it also featured a pitch from the CEO himself concerning autonomous vehicles that failed to win over investors.
Investors are still hell-bent at betting the company would soon be able to raise its capital. Still, the enthusiasm did not stop the stock price from falling 14 percent for the week – and is deemed to be its lowest since the start of January 2017. This was during the time the automaker decided to launch its titular Model 3 sedan, which was originally meant to help the company profitable.
It is safe to say that the week became the worst weekly drop for the U.S.-based automaker since August last year. At that time, the aforementioned CEO was part of a tearful interview in which he claimed to be under heavy emotional stress.
As far as the options market is concerned, Tesla contracts reportedly changed hands not once but twice the usual place. They are even believed to have sentiments heavily leaning toward defensive bets. This narrative, in particular, is according to Trade Alert, an options analytic company.
It is worth noting that Tesla has a junk bond of at least $1.8 billion, which, unfortunately, plummeted half a cent. As a result, it only managed to yield around 8.42%. The latter, in particular, is more three percentage points more than the coupon rate of the bond, which is 5.3%.
As for the company’s spread, it reportedly widened by around 15 basis points, to obtain a near-record of at least 611 basis points. The spread is also deemed to be the premium investors tend to demand for the added risk of holding the company’s debt instead of the much safer route, which is the U.S. Treasury security.
Apparently, though, there is an interesting development for the company as a whole. It turns out that a U.S. District judge gave Musk an approval, which is also a request of the Securities and Exchange Commission. This request refers to the possibility of having a second extension in an attempt to fix the infamous dispute involving Musk’s usage of social media site called Twitter.
Just recently, Tesla revealed a whopping loss of around $702 million, a figure that concerns the company’s March quarter. Musk explained that the company would be returning all profits come third quarter of the year. He even went to say that, in one way or another, there will be “some merit” when it comes to the idea of raising capital.
It cannot be denied that Musk is still trying to battle the narrative of convincing investors the demand meant for the Model 3 vehicle. As mentioned above, this one is the company’s first ever electric vehicle brought to the mass consumer sector. Musk believes that the demand is present and is even “insanely” high, enough to stir the interest of people across the world.
The electric automaker was successful in ending its first quarter of the year with around $2.2 billion in cash, although the figure was significantly down from $3.7 billion in the previous quarter. Apparently, though, the company is going to move forward with its expansion plans, which will include a factory in Shanghai and an upcoming vehicle called Model Y SUV, among many other projects.