Tesla jumps 10% in premarket as Musk's promise of 'more affordable' cars eases growth fears
Tesla shares surged about 10.5% in premarket trading on Wednesday after the electric-car maker eased some worries about slowing growth with a prediction that sales would rise this year and plans to roll out more affordable models in early 2025.
Investors had been bracing for the worst after a tumultuous week at Tesla that saw big layoffs, executive exits, price cuts and the postponement of a highly touted meeting with the Indian prime minister.
The newly minted plans also helped Wall Street shrug off the company's weak first-quarter results, including a lower-than-expected profit and the first drop in quarterly revenue in nearly four years.
«First impression for us is CEO Elon Musk is appeasing the market by accelerating new product launches,» Jefferies analysts led by Philippe Houchois said in a note.
Based on the premarket jump in its stock price, Tesla was on track to add nearly $50 billion to its market value of $460 billion. The stock has slid 42% this year as high borrowing costs have dampened demand for EVs and a price war in major market China intensified.
Tesla's growth strategy could strengthen support for a shareholder vote in May on Musk's $56 billion compensation package, which was voided by a Delaware court in January.
Some Tesla investors — such as Ross Gerber, president and CEO at Gerber Kawasaki Wealth & Investment Management — had said in recent days that they planned to oppose the package, citing a decline in Tesla's share price and a compromised board.
'De-contented Model Y/Model 3'
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