Tesla Inc.'s (TSLA) third-quarter production figures and its recent settlement with the Securities and Exchange Commission are positive steps away from the abyss that seemed poised to swallow the company last week.
They don't change the likelihood that Tesla will have need more funds from Wall Street, however.
"We continue to think they'll need to raise capital," CFRA Research analyst Garrett Nelson said. Tesla did not comment on its capital needs, so investors will likely have to wait until third quarter earnings. A date is not yet set.
Tesla will likely need funds in the first half of next year, the analyst projects, though he does not have an estimate of how much Musk will seek. Wall Street forecasts range into the billions.
Shares of Tesla dropped 2.76% to $302.13 on Tuesday, even though the company released positive details about the Model 3 electric car.
Tesla produced 53,239 Model 3s in the third quarter, a substantial gain from 28,578 Model 3 output in the previous quarter and within company forecasts of 50,000 to 55,000. Model 3 production hit 5,300 in the last week of the quarter. Deliveries of 55,840 Model 3s were slightly below expectations of 56,000.
"The production report was a positive," Nelson said. "They have a long history of over promising and under delivering relative to their guidance."
The negative reaction in the stock may reflect Tesla's comments regarding China on Tuesday.
"They mentioned that their margins are really being squeezed by the tariffs and by transportation costs," Nelson said.
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