Tesla shares slip as analyst calls company “uninvestable”
Tesla shares lost ground in morning trade after an analyst downgraded the company’s stock and called the company “no longer investable,” citing CEO Elon Musk’s “erratic” behavior.
“We are worried that this behavior is tainting the Tesla brand, which in terms of value is most important,” wrote Romit Shah in a Tuesday research note.
Shah, a self-described “bull” on Tesla’s prospects, lowered his rating on the stock to “neutral” from “buy.” He added, “Consumers are fickle and we suspect could become scared about buying a Tesla if they believe the company might not be around long term.”
Shares of Tesla dropped 2 percent in early trading. The stock has shed about one-quarter of its value in the past month.
Already under scrutiny for his public outbursts, Musk last week flooded cave in Thailand is a child molester.during a live interview with comedian Joe Rogan. The incident revived questions about whether Musk is the right person to lead Tesla, following his backtracking on taking the company private and claiming that a British diver who assisted in the rescue of a youth soccer team from a
Shah is now the second Tesla backer to recently question Musk’s leadership. Venture capitalist Gene Munster wrote last week that the CEO’s behavior was “making it harder and harder to support Tesla as a company.” He condemned.
Shah added, “We believe that Tesla is in need of better leadership (an about face) and are moving to the sidelines until we see what happens with management.”
Tesla drops color choices
Separately, the electric car maker is dropping two of the seven standard colors it had offered to customers as it tries to streamline production.
In a tweet early Tuesday, CEO Elon Musk said obsidian black and metallic silver will still be available, but at a higher cost.
Tesla fans can still choose as standard colors solid black and “midnight silver metallic,” as well as pearl white, deep blue metallic and red.
The company, based in Palo Alto, California, has struggled to vault from a niche maker of expensive electric vehicles into a mass-market automaker.
More than 400,000 people are on a waiting list to buy a Tesla; some have been waiting since March 2016, when the company first started taking orders.
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