Tesla Shares Sink 2.8%, Morgan Stanley Warns On Cash Burn

Tesla Motors Inc. shares sank 2.8% in premarket trade Thursday, as analysts weighed in on the company's quarterly earnings released late Wednesday. Morgan Stanley focused on cash burn, which it said was "eye watering", raising the stakes for the launch of the Model X, an SUV expected to start selling this summer. "Cash burn of $558mm (closer to $480m when including leasing cash flow from bank partners, but excluding warehouse line drawdown) was well above our forecast of $330mm of burn in the quarter," analysts wrote in a note. Telsa would exhaust its current $1.5 billion of gross cash in about 3 quarters, they estimated, making a capital intervention "desirable if not absolutely necessary." Shares are up 3.6% in the year so far, while the S&P 500 is up 1%.