Tesla Motors Inc (TSLA) Stock Drops Following Video Of Model S Catching On Fire
The Tesla Motors Inc (NASDAQ:TSLA) stock dropped over 7% today to a low of $175.40, but ended up closing at $180.95 (-6.24%). Why did the shares drop? The stock dropped because photos and videos have surfaced of a Model S catching on fire following an accident on the Washington State Route 167 just right outside of Seattle.
“Yesterday, a Model S collided with a large metallic object in the middle of the road, causing significant damage to the vehicle. The car’s alert system signaled a problem and instructed the driver to pull over safely, which he did. No one was injured, and the sole occupant had sufficient time to exit the vehicle safely and call the authorities. Subsequently, a fire caused by the substantial damage sustained during the collision was contained to the front of the vehicle thanks to the design and construction of the vehicle and battery pack. All indications are that the fire never entered the interior cabin of the car. It was extinguished on-site by the fire department,” said Tesla in a statement sent to Jalopnik.
Making matters worse, Baird analyst Ben Kallo downgraded Tesla Motors Inc (NASDAQ:TSLA) to neutral. Kallo said that Baird is bullish on Tesla’s long-term prospects, but they think that several milestones contain execution risk. Tesla stock still remains up 434% for the year-to-date.