Investor Defends Tesla (TSLA) on CNBC in Wake of Fatal Crash
NEW YORK (TheStreet) -- Investor and entrepreneur Jason Calacanis defended Tesla Motors (TSLA) - Get Report on CNBC's "Squawk Alley" Wednesday, in the wake of the controversy surrounding the fatal crash of a car using the company's autopilot function.
The accident occurred on May 7 and Tesla did not alert regulators until nine days later, while the public was not made aware of the crash until last week. CNBC's Phil LeBeau asked Calacanis if the company should have disclosed the information before it had a secondary stock offering, raising $1.46 billion on May 16 and May 18.
Tesla CEO Elon Musk had argued yesterday that the accident was not material to the stock.
"It seemed like (Tesla) followed the letter of the law," Calacanis replied, noting "people die everyday tragically in these car accidents."
There is still missing information regarding the crash, he argued.
"There's a not insignificant chance that this person was putting way to much power in the hands of the autopilot, which is a known experimental feature," Calacanis continued.
People using any sort of driver enhanced technology, whether it be autopilot or cruise control, still must pay attention to the road, he stated.
Another driver announced on Tuesday night that his Tesla Model X flipped on the Pennsylvania Turnpike on July 1, while in autopilot. That driver and passenger survived, the Huffington Post reported.
Shares of Tesla are falling by 0.96% to $211.92 early this afternoon.
Separately, TheStreet Ratings rated Tesla as a "sell" with a score of D+.
This is driven by some concerns, which can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.
You can view the full analysis from the report here: TSLA
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.