Coverage: Tesla shares rise as orders are up

Shares of Tesla Inc., suffering one of the worst stretches in company history, rebounded Thursday after CEO Elon Musk told employees that orders are up.

Tom Krisher of the Associated Press had the news:

The company’s stock closed up 1.4% to $195.49 on a volatile day that started out with a loss. Tesla stock has shed 16% in the past three weeks and about 41% since the beginning of the year, and is trading at the lowest levels since late 2016.

Musk told employees in a memo late Wednesday that the company had over 50,000 net new orders so far this quarter, and that based on current trends, Tesla Inc. has a chance of exceeding the record 90,700 deliveries set in the fourth quarter of last year. The memo was circulating on the internet and confirmed as authentic by a person with knowledge of its origin. The person didn’t want to be identified because the memo was confidential.

Musk’s memo said the company needs to sustain production of 1,000 Model 3s each day, something that it has done multiple days. It’s averaging production of 900 vehicles per day, the memo said.

Brian Deagon of Investor’s Business Daily reported that Tesla stock had initially fallen:

Tesla stock initially plunged almost 6% in premarket action, after a prominent Morgan Stanley analyst said the electric car pioneer is distressed and no longer a growth story. The fall in Tesla stock also came as another analyst lowered his first-quarter delivery estimates.

The tide turned as reports surfaced about written comments from Musk. In an email to staff, Musk said first-quarter deliveries will exceed the company’s fourth-quarter record of 90,700. He said Tesla is producing 900 Model 3 cars per day and is on the verge of reaching 7,000 vehicles per week, Reuters reported.

Tesla stock rose 1.4%, closing at 195.49 on the stock market today.

The Musk email comes as Wall Street analysts pick Tesla apart. Tesla stock sits at levels where it traded 2-1/2 years ago.

Simon Alvarez of Teslarati.com reported that the information should be taken with a grain of salt:

It would be wise to take the information in this leaked email with a grain of salt. Nevertheless, the scenario presented in the message is not too farfetched, considering that Tesla has already accomplished over 90,000 deliveries in the past. Augmented by the over 10,000 vehicles in transit at the end of Q1 2019, attaining these numbers should be quite feasible for the electric car maker.

Tesla stock has taken a severe beating in recent weeks in a perfect storm involving multiple bearish takes from Wall St analysts, the ongoing US-China trade war, a general decline in the auto industry as seen in the numbers of other carmakers such as BMW and Jaguar Land Rover, and the aftermath of the company’s lower-than-expected production and delivery figures in the first quarter. There’s little doubt that the Tesla narrative has turned predominantly negative recently, but if the company can exceed expectations this second quarter, there is a good chance that the electric car maker could still see a recovery in the near future.