Tesla Woes Make It a ‘Restructuring Story,’ Morgan Stanley Says

Dana Hull, Bloomberg News

Pedestrians walk past a closed Tesla Inc. store in Palm Desert, California, U.S., on Thursday, March 7, 2019. Tesla has cut prices of the Model 3 and its other vehicles several times this year to offset the lower incentives, most recently by announcing a plan to close most stores and shift all ordering online. , Bloomberg

(Bloomberg) -- A Wall Street analyst who had a price target as high as $379 on Tesla Inc. a little more than a year ago held a private call with investors Wednesday to elaborate on why he thinks the stock may now be headed for as low as $10.

“Tesla was seen as a growth story,” Morgan Stanley analyst Adam Jonas said on the call, a recording of which was obtained by Bloomberg News. “Today, supply exceeds demand, they are burning cash, nobody cares about the Model Y, they raise capital and there’s no strategic buy-in. Today, Tesla is not really seen as a growth story. It’s seen more as a distressed credit and restructuring story.”

Tesla shares extended a streak of declines to the sixth consecutive day, closing down 6% to $192.73, the lowest since December 2016. Jonas, who rates the Elon Musk-led carmaker the equivalent of a hold, issued a report Tuesday saying that Tesla may have “over-saturated” the market for battery-electric sedans outside of China.

Representatives for Tesla and Morgan Stanley didn’t immediately respond to requests for comment on the call. Morgan Stanley was among the underwriters for Tesla’s offerings of new common stock and convertible bonds earlier this month.

Business Insider reported on the call earlier Wednesday.

--With assistance from Felice Maranz and Joshua Fineman.

To contact the reporter on this story: Dana Hull in San Francisco at dhull12@bloomberg.net

To contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Chester Dawson