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Tesla stock continues to crash as Morgan Stanley adds fuel to the fire

Tesla stock continues to crash as Morgan Stanley adds fuel to the fire
Shares of Tesla continued to nosedive on Tuesday after Morgan Stanley cut its worst-case scenario for the automaker’s stock to just $10, citing concerns over slowing Chinese demand for its electric cars.

Elon Musk’s company stock was down 3.5 percent in premarket trading and was down more than 2.6 percent after the opening bell on Tuesday. Thus Tesla shares have declined in 10 of the last 11 trading days.

The yet another negative start came just one day after the stock plummeted below $200 on intraday trading, hitting the lowest price since December 2016. Monday’s collapse came after Wedbush Securities cut its price target on Tesla stock from $275 to $230 per share, with its analyst citing “major concerns” about the company’s future.

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The new blow negatively affecting Tesla's stock came from Morgan Stanley on Tuesday. A researcher from the investment bank slashed its bear forecast on Tesla’s stock from $97 to $10, stressing that the company misses the current Chinese volume forecast “by roughly half.” The electric cars’ producer may have over-saturated the retail market for battery electric vehicles outside of China, the analyst added.

“However, Tesla may now find itself in a cycle where a lower share price may itself contribute to a potential deceleration of employee morale as well as potentially increased counterparty risk with both customers and business partners ... potentially further impacting fundamentals,” Adam Jonas of Morgan Stanley said in a note.

Also on rt.com Tesla gets slap on the wrist from US environmental agency over hazardous waste violations

Earlier, investors were spooked after Musk told employees that the company must review “literally every payment” from its bank account amid tough cost-cutting measures or it will run out of cash in about 10 months. This is despite the $2.7 billion Tesla recently raised from stock and convertible notes.

For more stories on economy & finance visit RT's business section

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