Thursday, May 30, 2024
HomeTechnologyWhat the smart money is saying

What the smart money is saying


Elon Musk is being sued by the SEC

Analysts are telling Tesla investors to brace themselves.

“If you buy or own Tesla stock, be prepared for a wild ride,” Autotrader analyst Michelle Krebs told CNNMoney.

The Securities and Exchange Commission sued Elon Musk on Thursday for making “false and misleading” statements to investors in an August 7 tweet that said he had secured funding to take Tesla (TSLA) private at $420 a share. The SEC alleges he did not have the funding secured.

Tesla’s stock fell 12% to $270 a share on Friday.

The company’s future is in the “board’s court now and it remains to be seen what will happen next,” wrote Cowen analyst Jeff Osborne in a note. The firm slashed Tesla’s price target to $200 per share.

Tesla needs to raise $2 billion in the fourth quarter to avoid bankruptcy in 2019, Osbourne estimates. That will be more of a challenge with Musk’s future in doubt, Osbourne said.

The firm chided Tesla as a company “that has always over promised and under delivered.”

Barclays analyst Brian Johnson said that Tesla’s stock has a $130 “Musk premium,” which could disappear if he leaves. If a judge forces Musk to step aside, investors will “focus back on the value of Tesla as a niche automaker, rather than a founder-led likely disrupter of multiple industries,” Johnson wrote in a note aptly titled “Lawsuit Secured” to clients.

Citigroup downgraded Tesla’s stock to a “sell” rating. It slashed Tesla’s price target to $225.

CNNMoney (New York) First published September 28, 2018: 9:48 AM ET


Source link



Please enter your comment!
Please enter your name here

Most Popular

Recent Comments