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Tesla's Safety Record Called Into Question, And The Market Couldn't Care Less

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Tesla's Safety Record Called Into Question, And The Market Couldn't Care Less
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Tesla Inc (NASDAQ: TSLA) shares have rallied over 4 percent since Wednesday, undeterred by a report that elicited concerns about safety issues at its flagship plant in California.

The stock gap-opened higher on both these sessions and advanced through the day before ending just shy of the intra-day highs. Nevertheless, the stock is trading off the all-time highs of $325.22 hit on May 10.

Investors' Darling

The lack of reaction to the negative news is reflective of the bullish predilection of traders toward the stock. The hype around the impending launch of the Model 3 mass market car has enamored the stock to investors, who bid them up into unchartered territory.

Alarming Safety Issues

Even as everything is working in favor of the stock, the report on safety issues cropped up, raising worries whether it would impact the stock. From the looks of what transpired over the two sessions following the release of the report, Tesla is on a stronger footing, immune to the negative tidings.

The report released by worksafe.org consisted of comments by community and experts on Tesla's safety record. Some of the findings of the report were alarming, to say the least:

  • Tesla's injury rates in its Freemont facility exceed the national average.
  • Tesla's overall injury rate in Freemont has been one-third higher than the industry norms.
  • The serious injury rate, defined as those involving job transfers or missed days, is well over double the average.

"I have recently been made aware of a report highlighting workplace safety concerns at Tesla," said assembly member Tony Thurmond.

"Earlier in the year, I was visited by Tesla employees who came to me asking for help in addressing their concerns over workplace ergonomic issues at the Tesla factory. I call on Tesla to do all they can to improve worker safety. As chair of the Assembly Committee on Labor and Employment, I remain available to help Tesla and its employees improve workplace safety for all involved."

Meanwhile, Dr. Michael Wilson, director of occupational and environmental health at the BlueGreen Alliance said the data point toward ergonomic and repetitive stress injuries, which are largely preventable.

Josie Camacho, executive secretary-treasurer of Alameda Labor Council, called upon Tesla to take actions to improve working conditions and treat its workers fairly.

Technical Take

After Tesla's stock took a hit following the release of its fourth quarter 2016 results in February, it was seen consolidating for a while. With the company issuing an upbeat production guidance, the stock began ticking up in April only to be locked in a sideways trading range following the release of its first-quarter results on May 3. Nevertheless, the stock managed to scale the all-time high level on May 10. Since then, the stock has pulled back slightly.

TSLA Chart

Source: Y Charts

The stock is now ably supported by its 50-day SMA of $298.86. The 14-day relative strength index is currently at $55.44, suggesting that the stock is in the neutral zone. The upcoming catalysts would be any additional information on the timing of its Model 3 launch, which is expected around July this year.

Related Links:

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Posted-In: Alameda Labor Council Assembly Commitee on Labor and EmploymentTechnicals Travel Top Stories Tech Trading Ideas General Best of Benzinga

 

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