Tesla shares close below $150 for the first time in more than two years as analysts say they can no longer ignore Elon Musk’s Twitter nightmare

The shares of Tesla Inc. Closed Monday lower than $150 for the first time in more than two years after analysts said they are concerned that Chief Executive Elon Musk will be distracted from running the $484 billion electric-vehicle maker while also running the social media service Twitter.

Tesla TSLA,
-0.24%
shares closed 0.2% lower at $149.87. Factoring in the stock’s 3-for-1 split in August, the shares closed lower than they have been since October 15, 2020, when they closed at a split-adjusted $149.63. The S&P 500 index SPX,
-0.90%
fell 0.9% on Monday and the tech-heavy Nasdaq Composite Index COMP,
-1.49%
decreased by 1.5%.

Tesla shares are down 57.5% year to date, compared to a 19.9% ​​drop on the S&P 500 and a 32.6% drop on the Nasdaq. Tesla stock experienced its worst week since 2020 last week, as a high-profile investor called for Musk to name a new Tesla CEO and Musk sold $3.6 billion worth of Tesla stock, his second major share sale in just over than a month.

For more: Tesla stock suffers worst week since 2020 as Elon Musk sells, major shareholder calls for new CEO

Tesla stock has struggled since Musk agreed to acquire Twitter for $44 billion earlier this year, then sued to get out of the deal. Since officially closing the deal in October, it seems Musk has spent much of his time on the social media service, reportedly recruiting both Tesla and SpaceX employees in an attempt to redirect Twitter.

FactSet/MarketWatch

Oppenheimer analyst Colin Rusch demoted Tesla to underperforming in a Monday note, citing the maelstrom on Twitter and noting that he had previously tried to ignore it.

“While we continue to see Tesla develop EV and autonomous technology ahead of peers and drive costs to a level that those peers will struggle to match – and have sought to separate Elon Musk’s non-Tesla efforts (personal and professional) from our analysis on TSLA — we believe Mr. Musk’s acquisition and subsequent management of Twitter now makes that separation unsustainable,” Rusch said.

“The combination of Twitter’s unclear cash needs and dwindling ability for Mr. Musk to meet those needs amid the widespread public backlash caused by inconsistent standard application for Twitter users, particularly the banning of selected journalists, pushes us to the sidelines,” continued Rusch.

“Time to end this nightmare as CEO of Twitter,” Wedbush analyst Dan Ives wrote in a separate note Monday, citing a poll Musk posted on Twitter late Sunday asking users if he should step down as CEO.

Read: Poll shows Twitter users favor removal of Elon Musk

“From the botched verification subscription to the banning of journalists to political firestorms triggered on a daily basis, it has been the perfect storm as advertisers have run for the hills and left Twitter squarely in the red ink, possibly on track to hit about $4 billion per year, we estimate,” wrote Ives, who has an outperform rating on Tesla and a price target of $250.

Meanwhile, Senator Elizabeth Warren called on Tesla chairman Robyn Denholm to address concerns that the board has failed to meet its legal obligations by failing to address the CEO’s conduct.

Read: ‘Tesla is not Musk’s private toy’ — Sen. Elizabeth Warren asks Tesla chairman to address CEO’s conflict with Twitter

Of the 43 analysts who track Tesla, 27 have a buy-grade rating, 13 have a hold rating and three have a sell rating, along with an average price target of $281.19.

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