Reports of more car fires cause Tesla shares to continue to fall
After reaching a high of almost $195 on September 30, shares in Tesla Motors continue to slide amidst fears that its Model S sedan is prone to catch fire. As of November 8, the stock price is hovering around $103.
On November 6, the company confirmed that one of its vehicles caught fire after running over debris in the road in Smyrna, Tennessee. Similar incidents on October 1 in Seattle, Washington, and on October 18 in Merida, Mexico. No drivers or passengers were harmed during these incidents, but Tesla's value, which many analysts believe was inflated, is steadily dropping.
Writing on his MarketWatch blog, analyst Jim Jelter said that it's not surprising that individuals are shying away from a company that only produces electric cars.
"People are typically skeptical about new technology," Jelter wrote. "Tesla, of course, is all about new technology. Its cars use lithium-ion battery packs. And because a few of these new battery packs spontaneously combusted on Boeing's high-profile new 787 Dreamliners, lots of people don't yet trust them."
He also reminded readers that there are currently 15,000 Tesla Model S vehicles on the road, which means the three fires represent .02 percent of the entire fleet. In addition, he noted that despite the fires, Tesla stock has actually risen 300 percent over the past 12 months. So unless you jumped in at its peak, you probably won't see any significant losses.
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