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Tesla is hit by barrage of negative reports as problems mushroom over plan to go private

A litany of negative news engulfs the car maker, including calls for CEO Elon Musk to take time off from work
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Tesla is an electric car maker

Tesla Inc's (NASDAQ:TSLA) problems are mushrooming as the tumultuous developments that have enguled the electric carmaker seems to be spreading, media reports said on Monday.

The Wall Street Journal reported that some suppliers of Tesla are worried about getting paid as they fret about the company's financial strength. A recent survey by an automative supplier association said that 18 of 22 respondents believe Tesla is now a financial risk to their companies, the Journal reported.

Charles Gasparino of Fox Business News tweeted that "lawyers believes SEC is under pressure to expedite investigation; co officials could meet with SEC  this week; SEC faces pressure to act swiftly but not blow up any potential privatization deal that wld be good for investors--co sources."

READ: Tesla CEO Elon Musk rebuffs Arianna Huffington's calls for him to take time off

Musk has come under siege since nearly the beginning of the month after he revealed plans to take Tesla private.

Tesla's board has even formed a special committee to study the possibility.

Late on Monday, JP Morgan slashed its stock price target to US$195 from US$308 as its analysts concluded that funding for taking the company private is not there, a report by MarketWatch said. Musk had earlier claimed that Saudi Arabica's sovereign wealth fund supported the idea of taking Tesla private and was keen to proceed.

Shares of Tesla dropped in early trade on Monday to a session low of US$288.20 before recovering to end up 0.96% at US$304.44. 

Last week, Musk told the New York Times that no one reviewed his tweet about taking the company private. He has already received a subpoena from the SEC on the matter.

 

 

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