There are more reasons behind Tesla’s (TSLA) share price than Elon Musk’s focus on Twitter, according to auto analyst Colin Langan of Wells Fargo.
“It’s very worrying about the weakness we’re seeing in China,” Langan said on Yahoo Finance Live (video above). “We see incentives going up, and sales aren’t actually going up there. And [a] main concern is: are we going to see that in the US and Europe? Is that just sort of the early days of declining demand? And I think that’s more of the big institutional investor’s biggest concern.”
Shares of the EV maker are down about 67% from a peak in November 2021 — the biggest share drop since its market debut in 2010 — and are down 26% so far this month alone.
Most of the losses for Tesla investors began after Elon Musk offered to buy Twitter in April, a deal that closed in late October and may be as worrying among investors as declining global sales.
And the chaotic news flow surrounding the Tesla CEO shows no sign of abating.
“Should I resign as head of Twitter? I will abide by the results of this poll,” Musk said tweeted to his 122.1 million followers on Sunday.
The poll closed on Monday morning, with 57.5% of the 17.5 million voters voting “Yes” – though Musk did not reveal whether he would in fact step down.
Tesla shares opened higher on Monday in hopes that Musk would exit his post on Twitter, but shares ended Monday’s session slightly lower, reflecting the broader market.
The stock continued to fall Tuesday, falling more than 5% in afternoon trading after Evercore ISI analyst Chris McNally lowered his price target for the stock from $300 to $200 last week following bearish takes from Goldman Sachs, Wedbush. and Oppenheimer. .
Langan, who maintains an Equal Weight rating (Neutral/Hold equivalent) on Tesla stock, agreed that the situation at Twitter with Musk should be carefully watched by investors.
“Everyone has seen Elon’s ability to multitask, so that’s not something traditional institutional investors worry about,” Langan added. “But I do think there’s growing concern about potential brand damage from some of the headlines surrounding the Twitter situation.”
Brian Sozzi is editor-in-chief and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and further LinkedIn.
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