Tesla Plummets After Filing Warning With SEC

Sep.26.12 | About: Tesla Motors (TSLA)

By Joe Young

Tesla Motors (NASDAQ:TSLA) made a filing with the SEC on Tuesday, warning about sales and production. The company also lowered third-quarter guidance for its highly anticipated Model S sedan to a range of 2,700-3,250, down from previous expectations of 5,000 units.

Goldman Sachs was not surprised by the lowered guidance, as the firm expected the delivery projections to fall -- just not as soon as the company announced.

In a report published Tuesday morning, Goldman Sachs wrote, "Our conversations with the company indicate they viewed it as preferable to go ahead with de-risking the capital structure to remove as much investor doubt as possible post the pre-announcement. Management indicated no other factors leading to the timing of the offer, and that cash would remain around $100mn at Q3, ex the offering proceeds."

Clearly, the company is going to continue trying to put investors at ease while attempting to increase the probability of success.

Manufacturing and labor costs, inefficient production and high prices for parts are to blame for the lowered guidance, and Tesla Motors expects gross margins to be impacted negatively during its third quarter because of the Model S delivery limitations. The company recently announced ten new showrooms in efforts to continue attracting new buyers.

According to Tesla, deliveries for 2013 are expected at around 20,000 units and the company hopes to continue its plan to make the electric car more mainstream. Upon the announcement and SEC filing, shares of Tesla were sitting down 9.49 percent on Tuesday morning and have since made a 1.41 percent rebound.

In other Tesla news, the company unveiled its rapid charging station which can fully charge the vehicle in about an hour and can yield 150 miles of travel on just 30 minutes of charging. According to Chief Executive Officer Elon Musk, six roadside super-charging stations have been installed in California.

Year-to-date, shares of Tesla are down 1.79 percent. It's not easy to start a car company from scratch, but Tesla has made it further than most had expected. Likely a target for acquisitions if news continues to be negative, Tesla Motors is still a highly-anticipated automaker ready to compete in the rest of the plug-in and hybrid vehicle sector.

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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.