Tesla Inc. (Nasdaq: TSLA) is the latest Wall Street darling to be ravaged by bears due to an onslaught of negative headlines. The deadly Tesla crash in California has sparked a regulatory investigation, which is only adding to the liquidity concerns and worries about the Model 3 ramp. Tesla stock plunged to its lowest level in a year, giving short-sellers plenty to rejoice about, but one analyst sees the weakness as only temporary.
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Tesla crash under investigation by NTSB
The National Transportation Safety Board said today that it’s investigating the Tesla crash in California that claimed the life of the driver. It happened on March 23 in the Mountain View area, and the agency tweeted that it’s looking into whether Autopilot was engaged at the time of the accident. Regulators are also investigating the fire that happened after the Tesla crash and looking into the steps needed to safely move the vehicle from the scene of the accident.
The company itself offered up a few details about the accident in a blog post late Tuesday. The Tesla crash involved a Model X, and the company said that it hasn’t been able to retrieve the logs from the vehicle because of the “extensive damage caused by the collision.” Until Tesla is able to safely get those logs from the Model X, it won’t be able to understand what happened in the minutes leading up to the crash.
However, the automaker did say that one reason the Tesla crash was so serious is that the safety barrier that’s meant to reduce impact when a vehicle crashes into a concrete divider had been either removed or crushed in a previous collision and then not replaced.
Tesla stock plunges, giving short-sellers a boost
Tesla stock tanked on Tuesday and continued to dive on Wednesday, falling by about 9% to its lowest level in a year. Data from financial analytics firm S3 Partners indicates that Tesla stock is the second-biggest short among U.S. equities, with only Apple being larger. After the plunge following the Tesla crash, the company’s stock also became the most profitable short in the U.S.
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