Tesla Inc (TSLA) Shares Fall After Voluntary Recall of 53,000 Model S, Model X

Tesla Inc. (NASDAQ:TSLA) on April 20 is falling 0.86% or $2.62 to $302.83 on midday Thursday, after CNBC reported that the automaker ordered a recall of 53,000 Model S and Model X cars over a “potential issue” involving parking brakes. “We do not believe this issue could ever lead to a safety concern for our customers, and we have not seen a single accident or injury relating to it,” Tesla said according to the report. “However, in order to be overly cautious, we are going to be proactively replacing these parts to ensure that no issues arise.”

The cars affected were said to be built between February and October of 2016. The defect involves a small gear, which may have been improperly manufactured by Tesla’s third-party supplier. Tesla said the replacement takes 45 minutes and estimates that only 5% of the recalled cars will be affected.

What Does The Smart Money Sentiment Say?

The Smart Money pool sentiment is bullish on Tesla stocks as we saw an increase in hedge funds taking their positions on the automaker. Out of 742 funds we track at Insider Monkey, 38 funds hold shares of Tesla with a total value of $1.2 billion in Q4, compared to only 34 funds in Q3 who hold shares with a total value of $1 billion.

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The Bottom Line

Tesla is currently trading in the red at slightly below-average volume after news that Tesla is voluntary recalling 53,000 of its Model S and Model X cars. For further reading, here are the top 10 highest-rated auto insurance companies in America.

Disclosure: none.