Tesla Inc. stock was removed from Wedbush’s Best Ideas list on Thursday, with analyst Dan Ives citing the overhang from Chief Executive’s entanglement with Twitter Inc.
“In what has been a dark comedy show with Twitter, Musk has essentially tarnished the Tesla
story/stock and is starting to potentially impact the Tesla brand with this ongoing Twitter train wreck disaster,” Ives wrote in a note to clients.
“From selling Tesla stock again and again, to the PR nightmare that Twitter has become, cutting 50% of employees and then needing to bring some back, Musk’s attention focus from Tesla to Twitter, and ultimately the fear that this Twitter lightning rod of controversy on a daily (almost hourly) basis starts to negatively change the Tesla brand globally.”
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Tesla is Musk, Ives wrote, and it has made him the richest man in the world. Tesla is the golden child of his empire, and he’s changed the auto world much in the way that Apple Inc.’s
iPhone changed phones. But now he has managed to do what short sellers tried and failed — to crush Tesla’s stock despite the EV company being in a position of strength.
Ives said he still believes in the EV story as a longer-term play, but Tesla’s roughly 25% selloff since the Twitter deal is “an agonizing cycle for investors to navigate and has put massive pressure on the stock as its a Boy Who Cried Wolf narrative shaping up.”
Ives is sticking with his outperform rating on Tesla stock but lowered his price target to $250 from $300 to reflect the overhang.
The move comes a day after Musk abruptly ended a new project involving a new designation labeled “official” on some larger accounts that had launched on Wednesday.
Musk replied to a Twitter user later in the day saying “I just killed it,” regarding the project.
After eliminating the feature, Musk admitted that “Twitter will do lots of dumb things in the coming months.”
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It was also revealed on Tuesday that Musk sold nearly $4 billion worth of Tesla Inc. TSLA, -7.17% stock in the past three trading sessions.
Musk, who already sold over $31 billion in Tesla shares over the past year, said in April that he had “no further TSLA sales planned after today.”
Musk also sought to reassure big companies that advertise on Twitter on Wednesday that his takeover would not harm their brands, as the Associated Press reported.
Tesla was slightly higher premarket but is down 50% in the year to date, while the S&P 500 [s: spx] has fallen 21%.
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