Tesla (TSLA) Stock: Tumbles On Sales Blues And Court Hearing

Tesla Inc (NASDAQ: TSLA) is having an incredibly rough start to the trading session in the pre-market hours this morning, and for good reason. Not only did the company report a massive drop in sales for the last quarter, the comapny is headed to court to square off with the SEC. Today, we’ll talk about:

  • The earnings report and court appearance;
  • what we’re seeing from TSLA stock as a result; and
  • what we’ll be watching for ahead.

TSLA Stock Falls On Sales Blues And Court Hearing

As mentioned above Tesla is having an incredibly rough start to the trading session this morning after the comapny announced that sales fell dramatically in the last quarter. Moreover, the company’s attorneys are scheduled to square off with attorneys from the SEC today.

In the first part of the story, TSLA said that around 63,000 vehicles were delivered to customers in the first three months of 2019. That’s a massive 31% decline over the last quarter.

During the quarter, the company sold about 50,900 Model 3 sedans and 12,100 luxury Model S sedans and Model X SUVs. Unfortunately for the company, this proved to be the first quarter over quarter decline in nearly two years. Morever, it was the largest quarter over quarter sales decline that TSLA has ever seen.

Of course, declining sales are bad for any company. However, for Tesla, this could be deadly. After all, the company needs to keep sales high in order to pay off its massive debts.

On the other side of the coin, TSLA is headed to court today. A federal judge in New York is going to hear oral arguments in the lawsuit against Tesla’s CEO, Elon Musk that was brought by the United States Securities and Exchange Commission.

According to the SEC, Elon Musk should be held in contempt for violating a settlement deal that was previously reached. According to the settlement agreement, Musk was required to get pre-approved for social media posts about the electric car company.

According to the SEC, Musk violated the settlement del when he tweeted that Tesla will make around 500,000 cars in 2019 on February 19. Just hours later, he posted another tweet saying that this number would be more like 400,000.

If Elon Musk is found in contepmt, he could face some serious fines and further limits to social media use. Moreover, he could be stripped of his seat as CEO at TSLA. While experts expect that the judge will not rule that harshly, anything can happen.

What We’re Seeing From The Stock 

One of the first lessons that we learn when we start to dive into the market is that the news leads to moves. When it comes to Tesla, the news proved to be overwhelmingly negative.

After all, not only did the company produce a massive quarter over quarter decline in vehicle sales, its CEO is on the hot seat, facing contempt in a federal court today. So, it’s not surprising to see that upset investors are sending the stock tumbling down in the market today.

As is just about always the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (8:23), TSLA is trading at $262.35 per share after a loss of $29.46 per share or 10.10% thus far today.

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What We’ll Be Watching For Ahead

Moving forward, the CNA Finance team will continue to keep a close eye on TSLA. In particular, we’re interested in seeing what the company does to improve sales. Moreover, we’re interested in seeing how the court rules in terms of Musk’s contempt case. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!

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