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'Fast Money' Recap: S&P Down, Tesla in the Hot Seat

NEW YORK (TheStreet) -- The S&P 500 closed in negative territory for the second day in a row. 

Tesla Motors  (TSLA) CEO Elon Musk said the company would cover fire damage on any of its vehicles but that it's unlikely there will be a recall. The National Highway Transportation Safety Administration also announced it would investigate the Model S vehicle to determine if it has an increased risk of catching fire. 

TheStreet's Herb Greenberg was a guest on CNBC's "Fast Money" TV show and questioned the company's ability to cover warranties should there be a recall due to its low cash reserves. 

Craig Irwin, senior vice president of Wedbush Securities, said the investigation should ultimately be a good thing and that it would be extremely unlikely for a recall to occur. Irwin has a $205 price target on the stock and said Tesla's drivetrain costs will be halved by 2017. Investors should keep in mind that Tesla is a tech stock, not an automotive stock. 

Tim Seymour, managing partner at Triogem Asset Management, said the valuation is not supportive of the price and institutions do not seem to buying. He also added that Irwin upgraded the stock near its all-time highs. 

Guy Adami, managing director of stockmonster.com, admitted it would be hard to step in as a buyer at this point. 

Brian Kelly, founder of Brian Kelly Capital, said the stock's bounce off $120 was impressive and he would be a buyer with a stop-loss at $119. 

Dan Nathan, co-founder and editor of riskreversal.com, suggested that although the investigation could be a good thing, the technical damage to the stock is too bad and it seems likely to head lower. 

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