What happened

It was a rough Thursday for Tesla (NASDAQ:TSLA), when its shares were hit in the aftermath of the electric-car maker's bigger-than-expected first-quarter loss. On Friday, shares were down sharply for a second day in a row. They fell as much as 6.4% but are down 5.3% as of 2:50 p.m. EDT.

The stock's decline on Friday comes as Citron Research, a short-seller that reversed its position on the stock late last year and went long, is now saying it's no longer long or short on the stock. 

Investors may also still be reacting to the company's first-quarter earnings report.

A red Tesla Model 3.

Model 3. Image source: Tesla.

So what

"I do not believe the company is insolvent although I do believe they need to raise money," said Citron Research founder Andrew left in a statement to Reuters Thursday night. Further, "Left is disappointed with the way the company is communicating with shareholders," Reuters wrote. Left's shift away from a bullish call on the stock follows Tesla's first-quarter results, which featured a non-GAAP loss per share of $2.90 and a $1.5 billion sequential decrease in the company's cash and cash equivalents.

In addition, Tesla CEO Elon Musk's battle with the U.S. Securities and Exchange Commission is dragging on, as the two parties requested a second extension to settle a dispute about how Musk uses Twitter to communicate information about Tesla. 

Now what

Despite reporting worse-than-expected first-quarter deliveries and a significant quarterly loss, Tesla remains optimistic about the rest of the year. Not only does Tesla expect second-quarter deliveries to increase about 50% sequentially and more than double on a year-over-year basis, but management expects to narrow its loss in Q2 and return to profitability in Q3.