Citi downgrades Tesla to sell

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Elon Musk speaks on stage during the Westworld Featured Session during SXSW at Austin Convention Center on March 10, 2018 in Austin, Texas.

Citigroup downgraded Tesla’s stock to a sell rating from neutral Friday in light of a suit filed by the Securities and Exchange Commission against the electric car maker’s chief executive, Elon Musk.

Shares are down more than 12 percent in premarket trading.

“Ultimately it’s a risk/reward call we approach from a 50/50 chance of ‘bad’ or ‘Ok/good’ outcomes; we think even after the post-close stock pullback (to $274), risk/reward is still tilted negatively,” state the note.