Tesla (TSLA) Stock Stabilizes after News of Clash with Auto Dealers Association
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Price: $362.86 +5.14%
Rating Summary:
29 Buy, 26 Hold, 16 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
29 Buy, 26 Hold, 16 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Tesla (Nasdaq: TSLA) stock declined yesterday on news that the company is set to clash with a number of state auto dealers’ associations, who are seeking a preliminary injunction on Tesla retail outlets.
"The complaints accuse Tesla of violating state laws governing the sale of automobiles, specifically franchise laws that prohibit an automobile manufacturer from selling directly to consumers, and/or consumer protection laws," said Elaine Kwei, an analyst with Jefferies Equity Research.
Kwei said the dealers association is motivated by fear of a "slippery slope" that could soon have other OEMs bypassing the franchise dealership network model. For its part, Tesla maintains it is in compliance with all automobile retailing laws, which vary from state to state.
"While it's impossible to predict the outcome of any litigation, our sense is that the dealers' associations will likely pursue this issue through all available channels in the legal process."
So far suits have been filed in Massachusetts and New York.
Yesterday Tesla stock declined 3.4 percent, but it is stable intraday on Thursday, and is higher by 0.35 percent to $27.50.
"The complaints accuse Tesla of violating state laws governing the sale of automobiles, specifically franchise laws that prohibit an automobile manufacturer from selling directly to consumers, and/or consumer protection laws," said Elaine Kwei, an analyst with Jefferies Equity Research.
Kwei said the dealers association is motivated by fear of a "slippery slope" that could soon have other OEMs bypassing the franchise dealership network model. For its part, Tesla maintains it is in compliance with all automobile retailing laws, which vary from state to state.
"While it's impossible to predict the outcome of any litigation, our sense is that the dealers' associations will likely pursue this issue through all available channels in the legal process."
So far suits have been filed in Massachusetts and New York.
Yesterday Tesla stock declined 3.4 percent, but it is stable intraday on Thursday, and is higher by 0.35 percent to $27.50.
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