Shares of Tesla (TSLA) are trading lower after a slew of news caught investors' attention over the weekend.
Last Friday, the company disclosed that its Board of Directors will contract to seven members from its current eleven as a part of "stockholder-friendly corporate governance initiatives." Even though Elon Musk is no longer Chairman of the Board, he still has control of the Board. The departure of some of his allies looks like a step in the right direction as corporate governance remains an issue for the electric vehicle (EV) producer.
Over the weekend, a video out of China showed a Model S catching fire in Shanghai. The company said that it is investigating the cause of the incident. These videos are not uncommon and usually don't amount to much.
Evercore ISI downgraded the stock to Underperform this morning. The firm cut its delivery estimate for the year while noting that lower estimates should pressure the stock's valuation.
Meanwhile, the company will host a Tesla Autonomy Investor Day to show off its self-driving technology features later today. Autonomous driving features appear to be one of the company's strongest marketing tools. Tesla is the most aggressive automaker in terms of pushing the envelope on self-driving technology. Some are skeptical about Tesla's self-driving prowess. Tesla offers the most advanced autonomous driving features available on the road today while Alphabet's (GOOG/L) Waymo is said to have a lead in the space.
This all comes ahead of the company's first quarter financial results, which are due out on Wednesday afternoon. Expectations are low after the company preannounced disappointing deliveries earlier this month. A reduced federal tax credit and cannibalization between the Model 3 and more mature Model S have given credence to demand concerns for the first time. The company announced a leasing option to spur demand earlier this month. The company previously said that it will be profitable after the first quarter this year.
Meanwhile, the company is still in the process of negotiating a settlement with the SEC regarding Elon Musk's tweets of material information. That deadline comes on Thursday.
Demand and margin concerns leave Tesla stock near the low end of its two-year range ahead of some key investor updates.