$TSLA Continues Run Despite Fire Reports
$TSLA fell from record highs this morning following a BusinessInsider report that another Model S caught fire. But quickly rebounded.
The story, published after 6 p.m. Thursday night, said the four-month old electric car caught fire earlier this month in a Toronto garage. It was not plugged in at the time, according to the article.
The report included pictures of firefighters in a gutted and smoke-blackened garage. Investors worried that the new story would renew consumer fears of the Model S’s battery safety and reverse the stock’s run-up to earnings.
$TSLA Whether the news has substance is irrelevant, careful investors will still book profits when uncertainty strikes.
— Martin (@Grunin) Feb. 14 at 12:26 AM
But the stock was back in the green by 9:40 a.m. $TSLA has climbed nearly 22% since the company announced on Jan. 14 that fourth quarter sales would exceed guidance by 20%. Tesla will report earnings Wednesday, Feb. 19, after-the-bell.
Concerns about the $70,000 Model S catching fire have weighed on the stock in the past. Shares fell 6% in October after a Model S caught fire following a collision with a large metal object in the road. It was the third report of a fire involving a Model S in six months.
CEO Elon Musk took to the company’s blog at the time to allay fears that the 5-star safety rated Model S’s lithium ion battery would explode in a crash. He said that the Model S’s internal firewalls would have kept the October fire contained in the front of the car, away from the passenger area. He also blamed firefighters for puncturing the metal firewall surrounding the battery, allowing the flames to vent and spread.
Still, the National Highway Traffic Safety Administration opened an investigation into the cars about a month following the third fire. In January, the NHTSA said Tesla had issued a recall to guard against plugs overheating and causing fires. Musk took issue with the word “recall” saying that Tesla had sent a software update and mailed new plugs to the affected vehicles.
Musk took to Twitter at the time, writing on Jan. 14: “The word ‘recall’ needs to be recalled.”
Though Tesla’s stock fell into the red briefly this morning, the new fire report didn’t stall the run for long.
$TSLA Down 1% cause of fire. Fire! Nobody's listening.
— David C (@3fers) Feb. 14 at 08:46 AM
i remember when a Tesla fire would cause a sell off in the stock $TSLA
— Steven Spencer (@sspencer_smb) Feb. 14 at 08:46 AM
Some doubted the veracity of the new report. The article said that Tesla employees visited the Model S owner’s damaged garage and offered to pay for damages, but that the owner refused. That had some cashtaggers wondering whether further investigation of the fire would reveal that the vehical was not the cause.
$TSLA The Man Didn't Except Money Because it Was a Garage Breaker & Not The Car.
— Harry Stone (@captainkurk248) Feb. 14 at 07:38 AM
StockTwits’ sentiment analytics indicate that more than 90% of investors are still bullish on the stock.
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