It seems like Tesla’s stock rally ends Wednesday as the automotive company and tech giant moved to delay delivery of cars initially scheduled in early February amid the intensifying Wuhan coronavirus outbreak. Tesla’s shares plummet 14% as a result.
The delay in delivery specifically affected Tesla’s Model 3 vehicles, which started rolling out from their Shanghai Gigafactory to the Chinese market since early January.
The proposed delivery (of cars) in early February will be delayed,” Tao Lin, vice president at Tesla, announced on Chinese microblogging service Weibo, as translated by CNBC. “We will catch up on the production line once the outbreak situation gets better,” Tao Lin responds to a user question.
Tesla’s Chinese factory remained closed since the Lunar New Year following the guideline released by Beijing following the explosion of the novel coronavirus outbreak, which has now affect more than 24,000 individuals around the world and has killed about 490 people in China.
During that time, Tesla Chief Financial Officer Zach Kirkhorn said in an investor meeting that its Shanghai factory would remain closed for an extra week to week-and-a-half.
“This may slightly impact profitability for the quarter but is limited as the profit contribution from Model 3 Shanghai remains in the early stages,” he said.
The massive drop in Tesla’s stocks followed a bullish Monday, where shares for the company rallied to its biggest one-day gain for the last six years.
Tesla stocks soared more than 19% on Monday after Argus Research analysts raised its price target from $556 to $808. he research firm attributes the rise in price target to Tesla’s strong fourth-quarter financial report, which exceeded Wall Street’s expectations last week. Furthermore, Argus Research also raised its earnings per share estimate to $8.01 from $5.96 and expects that to double by 2021.
After the opening bell on Monday, Tesla’s stocks are trading $717 and eventually hit an all-time high of $786.14. The stock is up more than 85% year to date, pushing the company’s market cap to stand at just over $140 billion.