Tesla (NASDAQ: TSLA) stock price lost more than half of its value in the last month alone as slowing business activities and factory closures across the world on coronavirus fear is weighing on investor’s sentiments.
Although Tesla has resumed operations in its Shanghai factory, the company has fully or partially closed its other production facilities in Europe and the US.
The electric vehicle maker has announced to suspend production at its factories in Fremont and New York factory. However, the company still plans to continue operations at Gigafactory in Nevada.
Tesla claims that they are in a strong cash position to face an uncertain environment. They had almost $6.3bn of cash at the end of the latest quarter and the company has recently raised $2.3bn of capital.
“We believe this level of liquidity is sufficient to successfully navigate an extended period of uncertainty. At the end of Q4 2019, we had available credit lines worth approximately $3B including working capital lines for all regions as well as financing for the expansion of our Shanghai factory,” notes the company.
Tesla stock price halved and is currently trading around $430, down close to 50% from an all-time high of $970 that it had hit last month.
Wedbush Securities have declined Tesla price target to $425 from the previous target of $710, citing the minimum level of activity for Model 3s production in the following months and massive change in demand trends across the world.
Wedbush Securities analyst Dan Ives believes Tesla is unlikely to hit its original +500K delivery targets for 2020.
Tesla stock price has erased all the gains that it had generated during the early 2020 bull-run.
On the positive side, some investors are seeing the drop in Tesla stock price as a buying opportunity for long-term investors; they claim the current environment is not a longer-term defining trend.