The average rating of Tesla, according to FactSet data, is a “hold,” though estimates show its average target price of $243.53, about 23 percent above its current price.
Johnson said if investors are looking for names that will outperform in the last few months of the year, Tesla won’t be among them.
“I would move on to other names that look more attractive, like Apple, for example.”
Read more "Tesla shares are primed to mark a grim milestone"
Still, many analysts warn Musk’s entities have to find a firm base of support before they can be counted on the long term.
Ross Gerber, chief executive officer of Gerber Kawasaki Wealth & Investment Management, for one is souring on Tesla’s fortunes even as his company holds a $5 million position in Tesla and has recently been selling shares.
“He’s got guts, I’ll give him that,” Gerber told reporters, adding: “He really pushes it out on his companies, but Elon could implode.”
Read more "Elon Musk’s Fortune Plummets $779 Million As Tesla-SolarCity Flops"
But should a potential investor or customer engage their System 2 before buying Tesla stock or a Tesla vehicle, the case for buying the car — which is expensive, attractive, and seems to work fine as long as the driver can keep the battery charged – is far stronger than the case for buying the stock.
This comes to mind in considering the ginormous cash crunch facing Tesla due to its $2.6 billion merger with SolarCity — the solar energy service run by his cousins. (I have no financial interest in the companies mentioned in this post).
This merger offers investors four compelling reasons to bet against Tesla.
1. Strategic Rationale Is Weak
2. Musk Is Gripped By Delusions of Grandeur
3. Combined Companies Can’t Grow Out of Their Cash Conundrum
4. Tesla Has Weak Corporate Governance
Read more "4 Reasons To Bet Against Tesla"
Elon Musk failed to disclose his purchase of SolarCity stock.
Musk bought 570,000 shares of SolarCity stock on February 11, evidently near the time he discussed the possibility of a merger with cousin Lyndon Rive.
The per-share purchase price ($17.56) was significantly below the implied valuation of SolarCity stock in the merger; hence, Musk will realize a profit of several million dollars if the merger is approved.
Again, EnerTuition’s article has an excellent and nuanced discussion of the stock purchase, and the questions it raises, so I skip over it here except to note Musk’s stock purchase further taints a deal that already has a bad odor.
If you are a Tesla shareholder (or, indeed, a SolarCity shareholder), and deciding how to vote on the merger, would any of these topics be important?
- A budget for CapEx needed to achieve volume production of the Model 3;
- Any change in 2016 delivery guidance;
- Any change in the number of Model 3 deposits since April;
- The yield on Tesla’s 32,000 Model X deposits;
- Details about Model S order backlog and demand;
- Details about Tesla Energy sales;
- Details about Tesla Energy margins;
- Details about Gigafactory sub-suppliers;
- Details about the “safety stock” Panasonic is requiring Tesla to pay for;
- Update on whether Tesla still plans to begin Model 3 production in July 2017;
- Update on whether Tesla still forecasts production of at least 100,000 Model 3 car in 2017.
If you believe any of this information might be useful in considering the merger proposal, too bad for you. The S-4 is silent about all this.
Read more "Tesla & SolarCity: This Deal’s Getting Worse All The Time"
Audit firms are required by their professional standards to consider the possibility that the financial statements contain fraudulent misstatements and/or omissions. The auditing standards contain a number of indicators, or “flags,” that should alert auditors to the risk of fraud. PwC is likely beginning its client retention and planning for year-end audits right about now.
PwC client Tesla (NASDAQ:TSLA) is throwing off an extraordinary plume of fraud-risk indicators that is visible from deep space; red flags, orange flags, floating pink flags at high tide. As an artistic achievement, this colorful extravaganza might make Christo and Jeanne-Claude green with envy. Somehow we don’t think PwC will have the same reaction.
Read more "Tesla’s Extravaganza Of Fraud-Risk Indicators"
On Thursday, Zuckerberg struck an upbeat tone in his post about the rocket failure, noting that the company has other strategies in the works to expand internet connectivity across the world. Aquila, the Facebook-built drone, he noted, recently undertook its first successful flight in the desert.
Still, the setback will delay Facebook’s ambitious plans and even more ambitious timetable.
Shortly after his SpaceX comments, Zuckerberg struck a cheerier note by posting some “good news” from the region: A family of baby giraffes was seen on his safari.
Read more "SpaceX explosion puts goals of Facebook, Musk into question"