(News Bulletin 247) – Wedbush Securities maintains its ‘outperform’ view and $250 price target on Tesla despite Elon Musk announcing last night that he had sold an additional $3.6 billion worth of shares in the automaker electrical.
According to the analyst’s calculations, the businessman has disposed of some $40 billion worth of Tesla shares over the past year, which leads him to believe that the billionaire is now using his company as a simple ‘cash machine’ intended to fund Twitter’s losses.
Indeed, the micro-blogging site’s situation is deteriorating day by day, he explains, as shown by the recent exodus of advertisers provoked by Musk himself and his series of controversial remarks.
‘When is this all going to end?’ asks Wedbush, who compares the case to a nightmarish episode of ‘The Twilight Zone’ that would never end, or even go from bad to worse.
In a research note, the intermediary recalls that Elon Musk had made the promise, last April, to end his sales of Tesla shares, which put the stock price of the manufacturer under pressure, but that he has since done just the opposite.
For Wedbush, Musk now only has eyes for Twitter, instead of focusing on his golden goose Tesla which, coincidentally, has consistently underperformed the market since the takeover of Twitter last October.
In his note, the professional explains that he remains positive on Tesla only because of the group’s long-term prospects and its oversold character on the stock market.
According to Wedbush, the situation is now set to deteriorate to the point where activist investors will have to make their voices heard, forcing the board of directors to quickly take hold of all these issues.
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