Tesla (NASDAQ:TSLA) shares have been on a downward spiral since the start of November and this week, the electric vehicle stock price broke through the psychological $200 mark for the first time in over 18 months.
The recent bear run has led analysts and investors into a Twitter-wide opinion battle over the future of the automaker led by Elon Musk.
On Tuesday, shares from the company crossed another psychological threshold: losing more than 50% in value since January.
Gary Black, managing partner at The Future Fund, summarized the ongoing “bulls vs. bears” battle to his almost 250,000 Twitter followers.
“What are institutions saying?” Black wrote.
1: “$TSLA looks cheap.”
This bullish thought is in line with most analyst ratings for the company. After Tesla released its third-quarter earnings report Oct. 19, every analyst picked up by Benzinga’s platform maintained their previous bullish rating.
While most analysts lowered their price target for the EV company, one-year projections released after the third-quarter call stayed between $300 and $355, far above Wednesday's price.
2: “Positive revisions coming with big China 4Q,” Black said.
The fund manager is referring to a 5% price cut that Tesla announced for cars manufactured in its Chinese factory, which, according to Citi analyst Jeff Chung, has spilled over into cancellations for other competing EV makers in the Chinese market.
3: “2023 with Cytruck catalyst could be like 2020 with Model Y,” wrote Black.
Production for the Cybetruck — Tesla’s futuristic-looking, battery-powered, light-duty truck — will begin in mid-2023, and presales have already started. As the car starts to come out on the road, analysts are expecting the company to experience a similar push as when Model Y came out in early 2020, causing the stock price to significantly ramp up, doubling from $30 to $60 in less than two months, only to get cut off by the Feb. 20, 2020 stock market crash.
4: “Elon will have to put more $ into TWTR as advertisers flee.”
On the other side of the ring, Tesla bears are expecting Elon Musk’s Twitter acquisition to cause the tycoon to divert more resources into keeping the social media giant afloat, which could indirectly affect Tesla’s operations.
This could mean putting some of his own capital in (and away from Tesla), but the problem doesn’t end there.
According to CNBC, Musk’s workload went from 78 hours a week to about 120 since he became the new CEO of Twitter. Such a diversion could take a good deal of his energy away from the automaker.
Twitter is also cannibalizing Tesla on the human capital front. Musk has allegedly asked about 50 Tesla employees, mainly software engineers from the company’s Autopilot program, to split their hours supervising code for Twitter.
5: “I’ll wait until TWTR noise dies out.”
On a similar front, Black echoes more conservative Tesla bears who are expecting the company’s stock price to improve after the Twitter acquisition ceases to have such a strong presence in the headlines.
While this position is not arguing against Tesla’s fundamentals, it recognizes that the Twitter purchase has negatively affected the company’s share price and Musk’s reputation, which are more often than not tied together.
