Tesla stock (TSLA) fights back in early surge after Wall St. upgrade

Simon Alvarez

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Posted on March 19, 2020

Tesla stock (NASDAQ:TSLA) came roaring back on Tuesday’s early morning trading, bouncing as high as $434.54 per share amid news of an upgrade from Wall Street. In a recent note, Morgan Stanley analyst Adam Jonas upgraded Tesla from “Underperform” to “Equal-Weight,” while putting a $460 per share price target for the electric car maker’s stock.

In their note, Jonas and his fellow analysts stated that their long-term model on Tesla remains intact despite the ongoing disruption of the coronavirus, which has affected the global markets and has forced automakers to cut production. Tesla is reportedly operating its main Fremont factory at just 25% capacity as per reports from BuzzFeed News, citing a spokesperson from the Alameda County Sheriff’s Office.

Apart from acknowledging the effects of the COVID-19 virus, the Morgan Stanley analysts also updated their fiscal 2020 delivery forecasts to include about one month of lost production at the Fremont factory. Thus, Jonas updated Morgan Stanley’s forecast for Tesla to 420,000 vehicles this year, about 7% lower than its initial 450,000-vehicle estimate for 2020.

Jonas also highlighted that Tesla is currently at a strong financial standing to weather the headwinds from the coronavirus outbreak. This is something that was strengthened by Tesla back in February, when the company decided to raise an additional $2.3 billion in an investment round. “We believe Tesla has sufficient liquidity and access to capital during this time,” Jonas wrote in his note.

So far, Tesla investors appear to have appreciated Morgan Stanley’s upgrade. During the opening bell, TSLA stock showed a lot of strength, climbing as high as 18%. Tesla shares are up about 36% in the last 12 months, beating the S&P 500, which has fallen about 15%.

Jonas’ TSLA upgrade comes at a time when Tesla’s over $8 billion in cash is looking more and more like a valuable asset for the company. This is notably evident as other automakers have started hinting at challenges that are to come.

In a recent update, for example, Ford announced that it would be suspending its dividends to shareholders as a way to preserve cash and financial flexibility. But this is not all. Ford also revealed other measures that would allow the company to stay afloat amidst the coronavirus pandemic, including fully drawing on the company’s credit lines to provide $15.4 billion of additional cash. Ford has withdrawn its 2020 financial guidance as well.

As of writing, TSLA stock is trading +11.85% at $404.02 per share.

Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.

Tesla stock (TSLA) fights back in early surge after Wall St. upgrade

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Tesla targeted by Japanese electronics giant in cryptic lawsuit claiming patent infringement

Simon Alvarez

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Posted on March 18, 2020

Japanese electronics giant Sharp has filed a lawsuit against American electric car maker Tesla, alleging that the onboard communications equipment installed on the Model S, 3, and X are infringing on its patents. Sharp’s Tesla lawsuit comes not long after the Japanese firm also filed a case against TV-maker Vizio and smartphone-maker Oppo, also accusing them of patent infringement. 

As noted in a Nikkei Asian Review report, the Japanese electronics firm’s lawsuit against Tesla was filed in the Tokyo District Court. The company is also seeking an injunction against the import of Tesla’s electric vehicles, namely the Model S and Model 3 sedans, as well as the Model X SUV. 

Few details are known about Sharp’s claims against Tesla, though the firm’s mention of onboard communications equipment suggests that the alleged patent infringement involves the electric car maker’s infotainment systems, which provides primary access to its vehicles’ features.

This is quite interesting since Tesla’s cars have been equipped with the company’s updated infotainment system since May 2018. Even Tesla’s custom-built Hardware 3 computer has been rolled out to vehicles since last year. It is then a bit strange that Sharp would choose to file a case against Tesla at this point, considering that the Model 3, Model S, and Model X have been available in Japan for years. 

While the details about Sharp’s patent infringement claims against Tesla are scarce, the Japanese electronics giant has provided a lot of details about its grievances with the other companies it has recently sued. In Vizio’s case, for example, Sharp claimed that the TV-maker’s 70″ displays infringed on about 12 of its patents. Smartphone-maker Oppo, on the other hand, received a lawsuit from Sharp over alleged infringements on LTE patents. Both display technologies and LTE communications are present in Tesla’s electric cars. 

So far, a Sharp spokesman has declined to issue a comment about the firm’s patent infringement lawsuit against the American automaker. Tesla is quite the same, with the company not immediately responding to Reuters‘ requests for a comment. 

Tesla targeted by Japanese electronics giant in cryptic lawsuit claiming patent infringement

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GM, Ford hit by C-19 virus; VW, Daimler, auto industry reel in impact of Corona pandemic

Simon Alvarez

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Posted on March 17, 2020

The auto industry is now feeling the weight on the ongoing C-19 pandemic, with veteran automakers Volkswagen and Daimler announcing that they will be suspending production in their European facilities. The news comes as updates from GM, Ford, and Fiat-Chrysler in the US revealed that workers from the Big Three automakers have tested positive for the coronavirus. 

Volkswagen’s update was announced by CEO Herbert Diess, who spoke to reporters on Tuesday. Diess stated that amidst the pandemic, Volkswagen has decided to suspend work at most of the company’s European factories for at least two weeks. These include facilities in Spain, Slovakia, and Italy, all of which will be halted by the end of the week. 

Frank Witter, chief financial officer at Volkswagen, explained the decision in a statement on Tuesday. “The spread of coronavirus is currently impacting the global economy. It is uncertain how severely or for how long this will also affect the Volkswagen Group. Currently, it is almost impossible to make a reliable forecast. We are making full use of all measures in task force mode to support our employees and their families and to stabilize our business,” he said.

Fellow German carmaker Daimler also announced that it would be suspending most of its production in Europe for at least two weeks in an effort contain the spread of the coronavirus. In a statement, Daimler remarked that the closures would be affecting the company’s car, van, and commercial vehicle facilities. 

“The suspension applies to Daimler’s car, van, and commercial vehicle plants in Europe and will start this week. With these closures, Daimler is helping to protect its workforce, to interrupt chains of infection and to contain the spread of the pandemic,” the automaker noted. 

Amidst the reports from Europe, American automakers Ford and GM have confirmed to The Detroit News that one employee from each automaker has tested positive for the coronavirus. The carmakers stated that both workers, one from Warren GM and the other from Dearborn Ford, are currently in quarantine and receiving medical attention. 

In a statement, Ford spokesman T.R. Reid remarked that the worker who tested positive for COVID-19 was working remotely when the virus was contracted. As a result, the employee is expected to not have spread the virus to co-workers at the Dearborn facility. 

“He was exposed after leaving the office several days ago. He was diagnosed before returning to the office. Has not been to the office or any Ford facility,” Reid said, adding that there is currently no need to close the Dearborn plant since the affected employee never returned to the office since contracting the virus. 

The General Motors employee who tested positive for the virus, on the other hand, was in the Cole Engineering Center when COVID-19 was contracted. GM’s medical team is currently contacting individuals that may have had direct contact with the employee in question. Once determined, the potentially affected workers will be advised to self-quarantine for two weeks. Public health officials have been contacted to help clean and disinfect work and common areas at the GM site as well. 

In a statement, GM noted that the company had been in contact with the employee who contracted the virus. “We have been in contact with the family and put our emergency response plan into action, building on the preventive measures we have already taken, which include directing employees at the Cole Technical Center and other sites to work remotely if possible,” GM stated.

A Fiat Chrysler employee from the company’s Kokomo Transmission Plant in Indiana has also tested positive for the coronavirus. Reports indicate that the FCA employee is receiving medical attention, and those who he came in contact with have been put in self-quarantine. 

GM, Ford hit by C-19 virus; VW, Daimler, auto industry reel in impact of Corona pandemic

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