At the annual shareholders' meeting on Thursday, June 13th, after shareholders voted to approve CEO Musk's nearly $46 billion compensation plan, Tesla (TSLA) stock's upward momentum appeared to stall Friday morning. #2024 Macro Outlook#
Many analysts and Wall Street experts have made new and incredible optimistic predictions for the electric car company, including Wedbush's Dan Ives (who recently forecasted that Tesla's market cap will exceed $1 trillion by 2025) and Ark Invest (ARKK) founder, CEO and CIO Cathie Wood, who believes the stock could reach $2,600 by 2029.
However, not everyone is as enthusiastic about Tesla and Musk. Per Lekander, CEO and portfolio manager of the clean energy transition (who has been shorting Tesla for a long time), explained his $15 target price on Morning Newspaper, comparing Tesla to "the next Enron."
"Don't forget that while the market is up 20% to 25%, Tesla's stock has fallen 60% from its all-time high," Lekander said, citing Tesla's earnings and this year's stock losses to date. "So it needs to fall. Once it falls, it will fall further. I think what drives the price down is earnings. I think we're very, very close to a turning point because it's been a slide so far. Their car sales are poor, so they cut prices, so earnings are down..."
Lekander believes that Musk "missed ... what is happening in the entire electric vehicle field" amid the trend of the COVID-19 pandemic.
Is Tesla the largest stock market bubble?
Leander, who has been shorting Tesla since 2020, believes Tesla is the "biggest stock market bubble in world history." He pointed out that Tesla's models are outdated, valuations appear crazy, and earnings are rapidly declining. He expects Tesla's earnings to fall by 50% this year, and has a target stock price of $15. He also warned that once the Tesla stock falls to this level, it may trigger a large number of collective lawsuits and internal management issues.
Retail investors are key to supporting stock prices
Leander believes that retail investors are currently the key to supporting Tesla's stock price. The emotions and behaviors of these investors are crucial to Tesla's stock price. He said that once the situation deteriorates, retail investors will withdraw quickly, leading to further falls in the stock price. He predicts Tesla's earnings report will be the key factor affecting the stock price, especially in the upcoming Q2 earnings report.
Competition in the electric vehicle market intensifies
As traditional auto manufacturers enter the electric vehicle market one after another, Tesla is facing increasingly fierce competition. Leander pointed out that Tesla once dominated the electric vehicle market, but is now gradually being overtaken. He believes that the profitability of the electric vehicle industry will decrease significantly in the next few years, which will have a serious impact on Tesla.
AI and Tesla's future
When talking about Tesla's future, Leander expressed concerns about the company's prospects. He believes that Tesla will go from market leader to laggard, and will not be able to maintain its current high market cap. He firmly believes that Tesla's stock price will face greater downward pressure as the electric vehicle market changes.
Although Tesla's stock price currently has some support, facing declining earnings, increasing market competition, and fluctuations in the emotions of retail investors, the future stock price trend of Tesla is still uncertain. Leander's view provides investors with a different perspective, reminding people to be cautious about Tesla's stock price amidst the rapid development of the electric vehicle market.
"Hold Tesla stock and wait," do not buy now.
Chief information officer of Summit Global Investments, Dave Harden, called Musk's compensation package "excessive" and is currently bearish on the stock.
"I wouldn't buy Tesla at the moment. Musk is an outspoken leader, and I think there will be more discussion and more entry opportunities when you see growth about to happen clearly. So, primary growth is behind us. We know that, it's pretty obvious, but I think you'll hear more about it in the future," Harden added. "So if you're a risk manager, I might postpone this investment. If you're a growth investor, I might stick with it."
Yahoo Finance interviewed analysts and Wall Street experts who have a renewed optimistic attitude towards Tesla's stock, including Wedbush's Dan Ives (who predicts Tesla's market cap will exceed $1 trillion by 2025) and Cathie Wood, the founder, CEO, and CIO of Ark Invest (ARKK), who believes Tesla's stock price could reach $2,600 by 2029.