Shares of Tesla continue to slide. The luxury car maker's stock dropped 20% since the company sold a $1.84 billion convertible bond and almost $900 million of stock on May 2 to raise fresh capital and give it more time to stop losing money.
Citi analyst Itay Michaeli, who has a "sell" rating on Tesla, cut his price target to $191 from $238. He pointed to an email Musk sent to employees last week, telling them he would increase cost-cutting, and that the $2.7 billion in recently raised capital would give Tesla just 10 months to break even at the rate it burned cash in the first quarter.
"The recent reported internal memo, which seemingly called into question prior guidance, didn't help the risk/reward calculus. The implications can be serious, since an automaker's balance sheet is always subject to the confidence 'spiral' risk," Michaeli wrote in a client note