Tesla Stock Dives To Lows Not Seen Since 2016 - Here's Why

Tesla's stock price at the time this story was written was below $230 per share in mid-day trading. Tesla's stock has not been available at this low price since December of 2016.

Tesla Demand Issues
Tesla's stock has been trending down since last year, and its last milestone was going so low that Tesla's share price hit the lows seen during the time that President Obama was in office. The low stock price comes as Tesla struggles to convince investors that the market for Tesla's premium/performance models is still strong and viable. Tesla's deliveries in its most recent report did not inspire confidence in investors. Here in the U.S. market, Tesla's sales are dramatically off the high rate of Model 3 sales seen in the second half of last year.

Tesla Financial Picture
Tesla recently had a series of cash troubles. This time last year, Elon Musk told interviewers that the company was single weeks from "death" due to cash flow problems. This after glossing over the issue and being rude to investors who asked about it on formal investor conference calls. Tesla's low share price resulted in the company having to pay a bond issuer cash instead of stock to pay off debt. This was followed by yet another unprofitable quarter. Tesla recently raised more cash by selling off even more of its ownership. That new funding helped the stock price just a bit for a week or so, and now it is down even lower than before that move.

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Tesla Distractions
Tesla's latest distraction from making profitable cars and solar arrays is car insurance. Elon Musk has always been irked that Tesla cars are so expensive to insure. Studies have found that Tesla cars crash more often and cost more to repair than do other cars in its luxury classes. Insurance may well be one of the least profitable and most heavily regulated industries in America. The last thing that Tesla and its overworked CEO needs is another business to move Musk's attention away from profitability. Running a spaceship company, fighting with the SEC, engaging in name calling with random rescuers and filling the day on Twitter was more than enough to keep Musk occupied. Now he will be wrangling with insurance regulators for no good reason.

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Author Note: The author has never owned or traded Tesla stock.
Image Note: Tesla stock chart courtesy of NASDAQ and Google.

John Goreham is a senior reporter for TorqueNews.com. Please follow John on Twitter at @JohnGoreham and send tips for future news stories.