JPMorgan says Tesla stock plunge was triggered by Elon Musk’s tweets

Tesla Motors’ shares plunged Friday after JPMorgan Chase & Co. said the electric car maker faces a class-action lawsuit from the bank over Chief Executive Elon Musk’s now-withdrawn tweets that sent the company’s stock…

JPMorgan says Tesla stock plunge was triggered by Elon Musk’s tweets

Tesla Motors’ shares plunged Friday after JPMorgan Chase & Co. said the electric car maker faces a class-action lawsuit from the bank over Chief Executive Elon Musk’s now-withdrawn tweets that sent the company’s stock price downward.

JPMorgan analyst Ryan Brinkman on Friday said a San Francisco law firm has sued Tesla on behalf of all shareholders on October 21 over Musk’s tweets on the Roadster. That lawsuit is seeking a court order to block Musk from making any statements or tweets regarding Tesla or its business going forward while the class-action suit moves forward.

“We also believe the [class-action lawsuit] announcement comes shortly after Tesla posted on its website that it would be acquiring SolarCity, further complicated its cash position and potentially driven share price lower,” Brinkman wrote. He cut his price target on Tesla to $320 from $380.

Tesla shares fell 6.7 percent to $236.54 on Friday.

JPMorgan is set to release third-quarter earnings next week.

Musk, 45, and the electric car company were already under pressure from questions over reports that they were in the running to buy auto supplier Key Safety Systems for more than $3 billion.

Musk sought to quell speculation that Tesla was heading toward an investment or acquisition last week by saying that “we are not in acquisition talks” and that he would be “shocked” if Tesla was in talks with anyone.

He had also tweeted a few hours after his first messages that “I know lots of people will be looking to 10 percent increases in stock price as their measure of success, but in reality, the true measure of success will be continuous positive cash flow from operations and the ability to obtain a steady cash flow going forward.”

Musk also spoke of the possibility of using Twitter as a way to provide updates to shareholders.

Tesla also recently revised its vehicle delivery guidance after a falcon wing feature that was supposed to be included in the $35,000 Model 3 failed to produce the desired results, according to documents filed by the company. The Model 3 has been Tesla’s most important product due to its cheaper price and expected sales of about 500,000 a year.

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