Shares of electric-car company Tesla (NASDAQ:TSLA) jumped as much as 5.3% on Wednesday, recovering from a sharp decline on Tuesday. By the end of the trading day on Wednesday, Tesla stock was up about 4.9%.
The stock's rise on Wednesday may be nothing more than a rebound from Tuesday's decline, as investors reconsider the implications of news that Tesla received a "voluntary request for documents" from the Justice Department regarding CEO Elon Musk's controversial tweet about how he was considering taking the company private.
The stock's rise on Wednesday surprisingly comes amid several negative stories about the company, including former General Motors' vice chairman Bob Lutz saying Tesla can never make money on the Model 3. "The whole thing just doesn't compute. It's an automobile company that is headed for the graveyard," Lutz said during CNBC's Closing Bell yesterday after the market closed.
In addition, AutoNation CEO Mike Jackson criticized Musk's unfulfilled promise so far of a $35,000 version of its Model 3, saying, "... there's going to be a day of reckoning." Jackson said Tesla might not be around in 10 years if the company keeps up this "bait-and-switch" tactic with customers.
Tesla stock was not only resilient amid these negative headlines but fully recovered from its losses the day before. Investors seem to have decided that Tesla's 21% decline since Musk's Aug. 7 tweet was already enough of a beating.
In the coming weeks, Tesla's Model 3 production will come back into focus. The automaker will wrap up its third quarter on Sept. 30.
In a Sept. 7 blog post, Musk said higher Model 3 production meant the company was poised to deliver more than twice as many cars than it did in the second quarter of 2018.
Tesla reports its quarterly vehicle deliveries within three calendar days of each quarter's close.