What happened
Shares of electric car leader Tesla (TSLA +1.16%) had tumbled 2% as of 9:50 a.m. ET this morning on a series of negative headlines.
Last night, Cathie Wood's ARK Invest reported selling 27,900 shares of Tesla, its third straight day of selling, according to data from TheFly.com. (Perhaps not coincidentally, this was Tesla's third straight day of stock price declines as well).
And that was only the beginning of the bad news.
So what
On top of ARK's stock sale, Citigroup raised its price target on the stock, but only to $262 per share, a target that (if correct) implies that Tesla stock could fall as much as 75% over the coming year.
And the U.S. National Highway Traffic Safety Administration (NHTSA) saved the worst news for last: As NHTSA just announced, Tesla is recalling all of its Model 3 sedans from the model years 2017 through 2020.
Image source: Getty Images.
Now what
The good news is that this recall doesn't appear to involve a major defect. As NHTSA explained in its announcement, the problem is that in the affected vehicles, the "rearview camera cable harness may be damaged by the opening and closing of the trunk lid, preventing the rearview camera image from displaying," thus impairing "the driver's rear view, increasing the risk of a crash."
While this sounds bad, Tesla's fix seems simple enough. It proposes inspecting the vehicles in question and installing a guide protector and new cable harness as necessary, free of charge.
That being said, Tesla expects to have to inspect and possibly repair some 356,309 Model 3 vehicles to make this fix, and that's going to cost some money. Moreover, Reuters is reporting that 119,009 Tesla Model S sedans of unspecified model years will be recalled because the front hood may open without warning and obstruct the driver's visibility.
It all adds up to nearly a half-million possibly defective Teslas rolling around on U.S. roads. As consumers digest those numbers and decide whether they want to plunk down tens of thousands of dollars on a new Tesla in 2022, the biggest surprise today might be that the stock price hasn't fallen even further.
