- Tesla stock declined by 3% on Wednesday, amid concerns linked to issues at SpaceX.
- SpaceX is managing increased setbacks and debt related to its Starship rocket program.
- About 20% of engineers from Falcon 9 were moved to work on Starship after a June rocket explosion.
- Analyst price targets for Tesla stock range from $276 to $410, with a current price near $341.
- Further complications at SpaceX could continue to influence investor sentiment towards Tesla.
On Wednesday, Tesla stock dropped by 3%, as concerns grew over technical and financial challenges at its affiliate company, SpaceX. Investors are reacting to news that SpaceX is facing new engineering problems and rising expenses in its Starship rocket program.
According to people familiar with the company’s planning, SpaceX reassigned about 20% of its Falcon 9 engineering team for six months to help address the issues following a rocket explosion in June. This move highlights the team’s efforts to resolve technical hurdles in the Starship project.
The spending increases at SpaceX, although the company remains privately held, have led to investor worries that are spilling over into the public shares of Tesla. At the time of reporting, Tesla stock was priced at $340.84, down 2.7% over the past month.
Despite these challenges, Tesla recently made gains following the rollout and expansion of its Robotaxi program, which had raised some investor optimism. Stock analysts currently have a wide range of price targets for Tesla, from $276 at KGI Securities to $410 at Morgan Stanley.
Much will depend on coming events, as SpaceX plans the tenth test flight of its Starship as early as August 24. Continued development or further failures could impact both SpaceX and investor perception of Tesla, since many investors view the companies’ fortunes as closely linked. For more about related industry news, see NVIDIA-q2-earnings-report”>Nvidia (NVDA): How China Can Boost Its Q2 Earnings Report.
For now, Tesla and SpaceX will remain under close observation from investors as significant test milestones and financial commitments unfold.
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