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Why Did Tesla (TSLA) Stock Fall Friday?

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Shares of Tesla (TSLA - Free Report)  had sunk roughly 2.7% through late afternoon trading on Friday one day after Goldman Sachs (GS - Free Report) analysts said the company will likely have to raise billions of dollars over the next couple of years to continue funding the electric car giant’s operations. On top of that, investors have seemingly become more and more frustrated with CEO Elon Musk and all of his side projects.

Goldman

Analysts at Goldman told clients that the electric car company might require as much as $10 billion in additional capital by 2020. "We believe this level of capital transactions may be funded through multiple avenues, including new bond issuance, convertible notes, and equity," analyst David Tamberrino wrote in a note to clients on Thursday.

"We see several options available to the company to refinance maturing debt and raise incremental funds, which should allow Tesla to fund its growth targets."

Goldman’s claim comes after Musk repeatedly stated that the company won’t need to raise more money this year. Tesla’s CEO even went as far as to say "I specifically don't want to" on a call with investors and analysts.

But clearly, some analysts simply don’t agree as Tesla burns cash and faces continued setbacks on production of its mass-market Model 3.

Tesla noted in early April that it produced a total of 34,494 vehicles during Q1, which did represent a 40% surge from the fourth quarter. Tesla also said at the time that it had produced only 2,020 Model 3 vehicles within the previous seven days, yet Tesla hasn’t backed down from its goal to produce roughly 5,000 Model 3 units per week at some point during Q2.

Musk’s Other Ventures

Moving on, the electric vehicle company’s CEO continues to focus at least some of his attention on other endeavors at a hugely important time for Tesla. Over the last several days, Musk has spent time presenting The Boring Company’s new Hyperloop and talking about his grand ideas for the future.

There is clearly nothing wrong with this. And in fact, many investors were likely drawn to Tesla in the first place because of Musk’s big ideas for a better tomorrow. However, while Musk laid out plans for his Los Angeles Hyperloop and his new SpaceX “spaceport,” Tesla’s stock price continued to fall.

Recent Price Performance

Before Friday’s dip, shares of Tesla had fallen nearly 18% over the last 12 weeks as investors become increasingly nervous that this one-time Wall Street superstar might have a hard time becoming a legitimate automaker. Tesla’s recent downturn has dragged its stock price into the red for the year, with shares of Tesla down more than 9%.

Meanwhile, the likes of Ford (F - Free Report) , General Motors (GM - Free Report) , Volkswagen (VLKAY - Free Report) , Toyota (TM - Free Report) and many other more established automakers have pushed into the EV market.

Outlook

It is not all bad for Tesla as the company’s top line is expected to soar this year. Our current Zacks Consensus Estimates are calling for Tesla’s Q2 revenues to surge 41.9%, while full-year revenues are projected to skyrocket 61.2% to hit $18.95 billion.

Investors will be less pleased to see that Tesla is expected to report an adjusted loss of $2.63 per share in the second quarter, which would mark a nearly 98% decline from the year-ago period as Model 3 costs grow. Things look a little better for the full-year since Tesla’s earnings are projected to pop by 4.3%. But the company is still expected to report an adjusted loss of $8.29 per share. 

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