Tesla, Inc. (NASDAQ:TSLA) shares have fallen about 12% since the electric vehicle maker reported its second-quarter results. “The stock weakness reflected investors’ concern regarding further margin erosion due to potential price cuts,” said Future Fund’s Gary Black. CEO Elon Musk left open the possibility of further price cuts on the second-quarter earnings call, blaming it on a rising rate environment.
“The price cuts are unlikely to be supported by a decline in the cost of goods sold. Thursday’s weakness can partly be blamed on a report that said the company overstated EV range and the regulatory risks surrounding its full-self driving software, the spike in the 10-year Treasury yield by 13 basis points to 4% on Thursday on the back of better-than-expected second-quarter GDP data did not help matters any further. Rising rates hurt long-duration growth stocks mos,” said the fund manager.
