Tesla falls on growing angst over Elon Musk’s Twitter focus; shares down nearly 60% this year

Tesla investors are worried that Mr Elon Musk may need to sell shares further to fund Twitter. PHOTO: REUTERS

Bengaluru - Tesla shares fell nearly 6 per cent on Tuesday after a string of brokerages cut their price targets on the electric-vehicle maker’s stock, citing the risk from chief executive officer Elon Musk’s Twitter distraction.

The shares hit a more than two-year low of US$140.86.

Tesla shares, which have lost nearly 60 per cent of their value so far this year, closed down 0.2 per cent on Monday as Twitter users voted decisively in a poll for Mr Musk to step down as CEO of the social media platform.

Analysts say investors are worried that Mr Musk may need to sell shares further to fund Twitter, and sentiment around the acquisition of the social media firm could hurt Tesla’s brand.

Mr Musk has sold nearly US$40 billion (S$54 billion) worth of Tesla stock since late last year, with much of that going to fund his purchase of Twitter – despite repeatedly saying he would stop selling down his stake.

Evercore ISI, which slashed its price target on the company’s shares to US$200 from US$300, said investors fear damage to the Tesla brand.

Daiwa Capital Markets also cut its price target to US$177 from US$240, citing a “higher risk profile from the Twitter distraction”.

Analysts at Oppenheimer downgraded Tesla’s shares on Monday.

The price target cuts come ahead of Tesla’s quarterly deliveries report expected in early January amid weakening demand in China.

Daiwa lowered the company’s delivery estimate by 5 per cent for 2023, and forecast an 8 per cent reduction in revenue per unit year on year.

Mr Musk has said Tesla targets 50 per cent growth in delivery volumes annually. However, the electric-vehicle maker said it will miss the target this year due to logistics issues.

China’s passenger vehicle sales fell for the first time in six months in November and are expected to stay flat next year, the China Passenger Car Association said. REUTERS

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