Exasperated Tesla Bull Says Musk Needs ‘Come-to-Jesus’ Moment
“Elon is inseparable from Tesla and the brand,” Romit Shah, an analyst for Nomura Instinet, said on Bloomberg Television.
(Bloomberg) -- Tesla Inc.’s colorful and unpredictable leader Elon Musk needs to stop tweeting and engaging in erratic behavior to win back the confidence of investors, according to a longtime bullish analyst who just cut his rating on the carmaker.
“Elon is inseparable from Tesla and the brand,” Romit Shah, an analyst for Nomura Instinet, said on Bloomberg Television. “If he were to leave or take a lesser role, I think that it would be devastating for shareholders. What needs to happen is just a come-to-Jesus moment for Elon.”
Shah downgraded Tesla to the equivalent of a hold and slashed his price target to $300 on Tuesday, writing in a report that the company is “no longer investable.” While the company is on the path to profitability and is boosting production and deliveries, Musk’s incessant tweeting and controversial antics has undermined Tesla’s ability to retain executives, he said.
Musk, 47, has been averaging about 15 tweets a day since May, up from about four daily posts during the prior 18 months, according to Shah. He’s also taunted short sellers, accused a diver who helped rescue boys trapped in a cave in Thailand of being a pedophile and smoked marijuana while appearing on comedian Joe Rogan’s podcast.
“You worry about this behavior continuing and the impact this will have on Tesla’s brand, which is arguably their most valuable asset,” Shah said. “It’s created a big distraction. If you’re a long-term investor, it’s hard to stay focused on the fundamentals when this is going on.”
Musk’s behavior also is driving away executives, Shah said, pointing specifically to the loss last week of David Morton, Tesla’s chief accounting officer, after less than a month on the job.
“Just focus on growing Tesla -- that’s it,” Shah said, when asked what Musk needed to do. “You look at Tim Cook or Mark Zuckerberg or Jeff Bezos, you don’t hear about them in the headlines like this. He should just focus on running his business. He’s a visionary, he’s taken Tesla to a place we couldn’t have imagined and I think there’s a lot of room for the company to grow.”
--With assistance from Joe Weisenthal, Romaine Bostick and Caroline Hyde.
To contact the reporter on this story: Keith Naughton in Southfield, Michigan at knaughton3@bloomberg.net
To contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Jamie Butters
©2018 Bloomberg L.P.