NEW YORK (TheStreet) -- Shares of Tesla Motors Inc. (TSLA) are down -0.41% to $221.74 in pre-market trade after it was reported that the electric car maker is being sued in China for trademark infringement, a surprise development that casts a shadow over CEO Musk's ambition to expand rapidly there, Reuters reports.
Chinese businessman Zhan Baosheng, who registered the "Tesla" trademark before the U.S. company came to China, is now taking Tesla to court, demanding that it stop all sales and marketing activities in China, shut down showrooms and supercharging facilities and pay him $3.85 million in compensation, according to his lawyer, Reuters said.
The Beijing Third Intermediate Court will hear the case on Aug. 5.
TheStreet Ratings team rates TESLA MOTORS INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate TESLA MOTORS INC (TSLA) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and poor profit margins."