Tesla shares under Pressure due to Musk’s Twitter Antics
2022.12.19 07:19
Tesla shares under Pressure due to Musk’s Twitter Antics
Budrigannews.com – Colin Rusch, an analyst at Oppenheimer, downgraded Tesla (TSLA) stock from Outperform to Perform due to the growing risks associated with CEO Elon Musk’s take-private deal with Twitter.
Rusch believes that Tesla stock sentiment has been “severely damaged” as a result of Musk’s acquisition of Twitter and subsequent management of the company. “Any positive fundamental news in the near term will likely lead to select short covering followed by subsequent re-shorting,” as a result.
In a downgrade note, Rusch stated, “We continue to anticipate TSLA’s technology position being both tested and validated during 2023, which may be outweighed by negative publicity leading to additional volatility.”
The move to downgrade comes on the same day that Musk said he might quit his job as CEO of Twitter. The billionaire polled his followers to find out if he should step down as Twitter’s CEO. He then acknowledged that he is having trouble locating someone to take his place and “keep Twitter alive.”
“With his user management on the platform, we believe Mr. Musk is becoming increasingly isolated as the steward of Twitter’s finances. Rusch went on to say, “We see potential for a negative feedback loop from the departures of Twitter advertisers and users due to inconsistent standards, which may result in increased financing needs that may lead to incremental TSLA sales just as Tesla’s competitive environment intensifies.” This could happen because of the inconsistent standards.
Rusch insists that he has not changed his position regarding Tesla’s technology position. “leveraging unparalleled expertise in EV-related materials and AI coupled with a multi-year data advantage in materials performance and self-driving to drive significant cost and performance advantages in the transportation space,” he continues to believe.
More Must should step down as head of Twitter-Poll
Upon learning that Musk may resign as CEO of Twitter, Tesla stock is up 4.6% as of 06:30 EST (11:30 GMT).
