Tesla Inc.'s stock suffered its worst performance ever in 2022 and one analyst says Elon Musk’s decision to buy Twitter is largely to blame.
The most recent selloff of Tesla’s stock helped contribute to a total market cap wipeout of roughly US$891 billion from its peak in 2021. Market experts believe the stock can recover so long as Musk sets the course right with Twitter’s operations and limits his social media use.
“In order to turn around Tesla’s stock slump, Musk needs to first correct his US$44-billion mistake --- which was Twitter,” Dan Ives, the managing director of equity research at Wedbush Securities, said in a phone interview with BNNBloomberg.ca on Thursday.
Ives has been a long-time Tesla bull and remains optimistic on the stock for the long haul, but he wants to see Musk name a new Twitter CEO, immediately. This move would show investors that his focus would turn back to Tesla.
“There’s been a brand deterioration around Musk and that’s what’s created a black cloud around Tesla,” he stated.
Ives also makes the case that Musk needs to abstain from using Tesla as his personal bank machine in order to show he’s serious about the future of the business.
“The last thing I think would help the train wreck that was Tesla’s stock this year is for Musk to put forward realistic targets for 2023,” he added.
Ives holds a sector outperform rating on Tesla shares (the equivalent of a buy) and has a 12-month price target of US$175 on the stock.
Another market expert agrees that the issues pulling down Tesla’s stock price are a result of Musk’s handling of Twitter and his social media presence.
Despite those setbacks, Hatem Dhiab, a managing partner at Gerber Kawasaki Wealth and Investment Management, says Tesla is still a growth story.
“The issues surrounding Tesla are nothing but noise,” he stated.
Dhiab believes out of all the electric-vehicle makers in the world, Tesla is the best positioned to succeed.
“Tesla is one of the few U.S. car makers that can manufacture more than 100,000 electric vehicles (EV’s) at scale. It will probably make close to two million EV’s in 2023 and could hold more than 60 per cent of the U.S. market share,” he stated.
“All things considered, I think there is a chance Tesla’s stock could trade as high as US$500 in the next four years,” he stated.
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