May 24, 2019 11:15 AM, EDT

Musk’s Bullish E-mail Puts Battered Tesla on Roller-Coaster Ride

Elon Musk Elon Musk by Mark Lennihan/AP.

Even for oft-volatile Tesla Inc., the morning of May 23 will go down as one of the more memorable roller-coaster rides.

Another bearish bit of analyst commentary about the Model 3 maker facing demand woes sent the stock tumbling as much as 5.6% in early trading. A little more than an hour later, shares were up 3.6% after a bullish e-mail surfaced on a Chinese social media forum that Elon Musk had supposedly sent to employees.

It looked as though the rally would be short-lived. The shares again went negative until several media outlets, including Bloomberg, confirmed the authenticity of the e-mail with sources who asked not to be identified.

Tesla showroom

Tesla showroom by David Paul Morris/Bloomberg News.

Musk’s memo countered days of escalating doubt that Tesla will hit its vehicle delivery targets this quarter, with the CEO writing that the company has a “good chance” of exceeding the record 90,700 deliveries achieved in the last three months of 2018. He also said Tesla has received more than 50,000 net new orders this quarter.

Multiple analysts had cast doubt on Tesla’s ability to deliver at least 90,000 electric vehicles this quarter and 360,000 this year. Gene Munster, a managing partner of venture capital firm Loup Ventures, became the latest May 22 when he told Bloomberg Television that 2019 is “going to be a difficult year.”

In a note May 23, Munster trimmed his estimate for how many vehicles Tesla will deliver this year by about 10% to 310,000, short of the minimum 360,000-unit forecast by Musk. Munster lowered his expectation to factor in the risk that China may slap Teslas with tariffs and that consumers in the world’s largest electric-vehicle market may boycott the brand as the trade war with the United States intensifies.

“It’s been difficult for analysts and investors to guess what demand is for this year,” Munster told Bloomberg TV in a follow-up interview May 23.

At least six analysts have cut their price target since the stretch began, according to data compiled by Bloomberg.

For Musk, 47, it’s the second time in a week that an e-mail he has sent to employees leaked to the media. Tesla shares closed at the lowest level in almost 2½ years May 17 after the CEO wrote that the company would be conducting a “hardcore” review of expenses to protect the carmaker’s cash.

Before the deliveries e-mail surfaced, Munster said that Musk needed to be “more judicious” when setting expectations for what Tesla will achieve.

“[It’s] unlikely that we’re going to get that anytime soon, so whatever he says, dial it back by 40% and that’s probably the right answer,” Munster said of Musk.