Tesla's stock is finishing out its tumultuous year with yet more turbulence: It's up almost 6% Thursday, but still down more than 10% since last week. And a new cut to its price target from Morgan Stanley isn't helping.
Year-to-date, the stock is down about 70%. Morgan Stanley analysts on Thursday said that the company's sliding stock price represents a buying opportunity, but they cut its price target from $330 per share to $250. Tesla shares are trading at $122, with the stock up about 8% Thursday.
Even as Musk signals he may give up his CEO title at Twitter, investors became concerned that the outlook for Tesla's sales and profit is taking a turn for the worse. A sign of the weakening demand: Tesla has announced a rare sale. The company offered two rebates for buyers who take delivery of a vehicle before the end of the year, initially offering a $3,750 discount earlier this month. Tesla then doubled that rebate to $7,500 last Thursday.
"I think there is going to be some macro drama that's higher than people currently think," he said, according to Reuters, adding that homes and cars will get"disproportionately impacted" by economic conditions.Part of the problem with Tesla's stock price is that critics question whether it was ever worth the trillion-dollar valuation it had at the start of the year.
The stock's climb to dizzying heights -- rising 743% in 2020 alone -- was driven by Musk's reputation as a genius who would disrupt the massive global auto industry. Now production is slated to start next year, with a ramp-up in production in 2024, putting it years behind other electric pickup offerings from Ford and upstart EV maker Rivian, both of which have electric pickups available for purchase today. It could also trail planned electric pickup offerings from General Motors.
"Demand in the US has collapsed," he said."Two months ago, your wait time was two or three months. Now you can get one immediately. They're going to build more cars than they sell for a third straight quarter. It's the definition of excess capacity."
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