Tesla stock fell Friday even after CEO Elon Musk told investors he does not plan to sell any more of his Tesla share for another two years. TSLA shares sustained heavy losses Thursday amid economic uncertainty which has led six analysts to downgrade the EV giant this week.
Tesla stock tumbled nearly 9% to 125.35 Thursday after CarMax missed big on quarterly earnings, citing vehicle affordability issues. Other auto industry stocks also booked losses.
Tesla's slump Thursday sank shares to the lowest point since Sept. 2020. The leading EV company has shed more than 35% since the beginning of December. On Wednesday, Tesla doubled its year-end delivery discount in the U.S. to $7,500 — ostensibly an effort to drum up late fourth-quarter sales.
Late Thursday Musk joined a Twitter Spaces call to talk with big activist investors and fund managers. During this call, Musk said he "won't sell stock next year under any circumstances" through 2023, perhaps not until 2025.
Headwinds Are Blowing But Can Tesla Weather The Storm In 2023?
Tesla stock shed premarket gains to close down 1.8% at 123.15 in Friday's market action, hitting their lowest levels since September 2020. Musk has sold nearly $39 billion worth of Tesla stock since shares peaked in November 2021, including yet another batch in mid-December. His latest round of Tesla stock declines began after he took over Twitter in a $44 billion deal at the start of October.
TSLA stock plunged 18%, following the prior week's 16.1% dive. Those are the EV giant's two worst weeks since the Covid crash in March 2020.
Analysts Raise Tesla Stock Concerns
In the past, Musk has signaled he is finished selling Tesla stock, then went on to divest more shares. Late Thursday, Musk told investors that Twitter is expecting negative cash flow of $3 billion per year, which includes debt service on funds borrowed in the purchase of the company. Musk cited Twitter's financial situation as the reason he has spent the past five weeks seemingly focusing solely on his latest enterprise.
Since Musk took over Twitter, analysts have said the billionaire's tweets and the news cycle surrounding him is hurting Tesla investors. Musk has repeatedly used Twitter to make political statements and interact with people across the political spectrum.
On Thursday, Musk made it clear he does not intend to change how he uses Twitter.
"I'm not going to suppress my views just to boost the stock price," he said.
Wedbush analyst Dan Ives, a longtime Tesla bull, accused Musk of being "asleep at the wheel" Friday, and cut his Tesla Q4 delivery target to 410,000-415,000, down from the previous 450,000.
"The absolute last thing the Street wants to see is this Musk soap opera play out on the world stage with Tesla investors/bulls feeling like Rocky Balboa on a daily basis," Ives wrote, referring to Twitter.
Tesla Stock: A Round Of Price Target Cuts
The analyst also cut Tesla stock price target to 175 from 250, keeping an "outperform" rating for the shares. Canaccord also cuts its price target for Tesla Friday morning, making six analysts this week that have cut price targets on TSLA shares. However, analysts maintained buy and outperform ratings on Tesla stock.
"The reality is that after a Cinderella story demand environment since 2018 Tesla is facing some serious macro and company specific EV competitive headwinds into 2023 that are starting to emerge both in the U.S. and China," Ives added.
Meanwhile, Bloomberg reported that exchange traded funds owned by Cathie Woods' Ark Investment Management bought more than 445,000 Tesla shares since Oct. 3. The buys mark Ark's first net increase in Tesla stock, following a six-quarter pause, according to Bloomberg.
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