Drop it like it's hot?
Tesla Inc. (TSLA) shares fell over 7% as the market closed on Tuesday, July 3, as two analyst notes and a controversial article out on Tuesday offset Tesla's announcement that it beat its production target of 5,000 Model 3's in a week.
JP Morgan analyst Ryan Brinkman reiterated his underweight rating for the electric car company. He also holds his price target of $180.
Tesla ended Tuesday down $25, or 7.3%, at $310.50, its lowest close since June 5. It was the worst one-day decline for the stock since March 28 when it fell 7.7%.
Bernstein analysts believe that Tesla's issue going into the second quarter will be the profitability of the Model 3 due to the push to get the 5,000 out for the production target, which was released on Monday.
Business Insider UK reported on Tuesday that Tesla engineers didn't run critical braking and rolling tests because of the push to hit the 5,000 production target. A reporter was able to get a document that it claimed came from the Fremont, California, Tesla factory.
"Elon Musk ordered his employees to stop putting near-finished Model 3's through a critical test" before the cars left the factory according to Business Insider.
In an email to TheStreet, Anton Wahlman, a Tesla expert, said, "I don't know if the information in today's article is true or not. I imagine this puts pressure on the company to have to clarify and dispute in more detail than it already has."
The company defended its testing procedures. "Every car we build goes through rigorous quality checks and must meet exacting specifications, including brake tests. To be extremely clear, we drive every Model 3 on our test track to verify braking, torque, squeal and rattle. There are no exceptions," said a Tesla spokesperson in an email to TheStreet.
In the past year, Tesla is down over 3.5%.