The pain for Tesla investors is unending as a rough week draws to a close.
Tesla shares fell another 4% today, to a multi-year low, and sent the stock down nearly 16% for the week through midday trading.
Tesla investors have blamed CEO Elon Musk for the stock’s near-term weakness, with Twitter the main source of criticism. Long-term shareholders find him distracted from running Tesla and quit the company during a critical period and put downward pressure on stock prices with recent stock sales.
Gary Black, a well-known long-term Tesla shareholder, believes today’s weakness could be attributed to more selling:
If true, this comes after a filing this week in which Musk revealed he sold 22 million Tesla shares beginning Monday and ending Wednesday. The deal value is about 3.6 billion USD.
This leaves the community of Wall Street analysts pondering over moves that come at a bad time for Tesla shareholders.
The Twitter nightmare continues as Musk uses Tesla as his own ATM to further fund Twitter, which is only getting worse as more advertisers leave the platform with controversy. [increasingly] driven by Musk,” Wedbush’s Dan Ives wrote in a note yesterday. “At the end of April, Musk said he had finished selling Tesla stock, instead, the exact opposite happened and put a lot of pressure on Tesla stock, which has underperformed in the market. since Musk took over Twitter in late October.”
Goldman’s Mark Delaney echoed a point that has been loudly shouted by Tesla investors this week – Musk must return to Tesla and focus the company on its current mission, continuing to globally replace ICE vehicles with EVs.
Delaney said Tesla needs to shift the company’s focus on consumers back to “the core attributes of sustainability and technology,” to exceed their long-term expectations for Tesla.
Despite the short-term negative sentiment towards Tesla in the analyst community, one analyst sees Tesla as a buying opportunity.
“At current prices, we view Tesla stock as undervalued, trading at four stars,” Morningstar analyst Seth Goldstein wrote in a note yesterday.
Despite the economic difficulties Tesla is facing in China and the EU, Goldstein believes that IRA federal subsidies for electric vehicles will “benefit” Tesla in the US starting next year. “Okay [the IRA effect] and the company’s relatively small 1.2 million delivery volume on an extended 12-month basis, there is still room for strong demand even in the midst of an economic downturn. We continue to predict that Tesla will deliver nearly 1.4 million and 2.1 million vehicles in 2022 and 2023, respectively.”
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Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and more Instagram.
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