Tesla shares fall on caution about run
The idea that Tesla Motors shares won't go up forever is apparently news to some investors.
The stock fell sharply Monday after a Morgan Stanley analyst wrote a note saying Tesla 's steady rise over the past two years won't go unabated.
The analyst, Adam Jonas, is a big fan of Tesla, and predicts shares will rise about 25% from the current price,
But he says there are several factors that could drag on the stock, including slow growth in China and the belief that the new Nevada 'Gigafactory' announced last week will not cut battery costs as much as expected.
Tesla shares are up 67% so far this year, even with Monday's sell-off.
Related: Consumer Reports puts some dings in Tesla's reputation
The stock fell despite a favorable court ruling for Tesla in Massachusetts. The state's highest court said car dealers in the state are not hurt by Tesla's company-owned stores.
The dealers said independently owned dealerships provide a level of protection for car buyers. But Tesla argued it needs to sell directly to consumers because dealers who sell mostly gas-powered cars can't explain the advantages of electric cars to potential buyers.
The court sided with Tesla, saying that since there are no independent Tesla dealers in the state, there is no dealer who is being hurt by Tesla having company-owned stores.
Tesla's only store in Massachusetts is in the Natick Mall in suburban Boston.
The court decision in Massachusetts is part of an ongoing battle between Tesla and state car dealers associations. Most states have laws that limit the ability of automakers to own the stores or dealerships where cars are sold.
First Published: September 15, 2014: 2:45 PM ET
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