(Bloomberg) -- Tesla's claims that Model 3 cars made on a tent-covered production line were of the same quality as those made inside the plant were questioned by Bernstein analyst Toni Sacconaghi, who also said reservations for the vehicles appeared to be stable to slightly down. Tesla shares fell 7.2 percent at the close, the biggest drop since March. Tesla's two-day skid has erased more than $5 billion from the company's market value, putting the company back below General Motors for the first time since June 25.
- While Tesla has re-affirmed its forecast for achieving GAAP net income and positive cash flow in 3Q and 4Q, even if the company meets these targets, it will likely be due to "one-time austerity" or product mix factors and "won't resolve the fundamental controversy of long-term Model 3 profitability," Sacconaghi said in a note; he rates Tesla market perform with a $265 price target
- Tesla's comments on Model 3 net reservations raise concerns about demand, Goldman Sachs analyst David Tamberrino said in a note; he rates the stock sell
- Tesla bull Romit Shah of Nomura (buy, PT $315) Instinet said the selloff in Tesla is a good opportunity for investors to buy more as the production milestone re-establishes some credibility and positions Tesla for profitability in the 2H of 2018
- Tesla 10 buys, 11 holds, 10 sells; avg PT $315: Bloomberg data
- NOTE: Earlier, After Long Slog to 5,000 Model 3s, Tesla Said to Take Break
To contact the reporter on this story: Jeran Wittenstein in San Francisco at jwittenstei1@bloomberg.net
To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Scott Schnipper
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