The Impact of Tesla’s Brake Failure on the Company’s Stock Price

Abstract

The research is based on the current social issue, “Tesla brake failure scandal”. The stock price of Tesla has long been a subject that has attracted researchers from a diverse range of fields including mechanism, economy and finance. In this work, theoretical insights of situational crisis communication theory is synthesised in the context of economy principles, based on which a conceptual framework is analysed. In this article, the future price of Tesla stock is predicted through 5 aspects, including: situational crisis communication theory, investor sentiment, investor behavior, market status and economy policies. It is found that the stock price will fall in a short term and rise back in the future. The findings also provide guidelines for Tesla investors in investing and also provide similar example for investors’ investment when facing sudden negative incident. Therefore, the essay is a pioneer in combing the theories and finance market practice, while accurate data could be analyzed in the future.