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Tesla analysts say they can’t ignore Twitter ‘nightmare’ anymore

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Wall Street analysts covering Tesla Inc. are concerned that Chief Executive Elon Musk is being distracted from running the $484 billion electric-vehicle maker by his role running the social-media service Twitter.

Oppenheimer analyst Colin Rusch downgraded Tesla 
to perform in a Monday note, citing the maelstrom at Twitter and noting he had tried to ignore it previously.

“While we continue to see Tesla evolving EV and autonomous technology in advance of peers and driving costs to levels those peers will struggle to match—and have tried to separate Elon Musk’s non-Tesla endeavors (personal and professional) from our analysis on TSLA—we believe Mr. Musk’s acquisition and subsequent management of Twitter now make that separation untenable,” Rusch said.

“The combination of Twitter’s unclear cash needs and diminishing options for Mr. Musk to serve those needs amid the broad public backlash driven by inconsistent standards application for Twitter users, notably banning select journalists, is pushing us to the sidelines,” Rusch continued.

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

Read: Poll shows Twitter users favor removal of Elon Musk

“From the botched verification subscription plan to banning journalists to political firestorms caused on a daily basis its been the perfect storm as advertisers have run for the hills and left Twitter squarely in the red ink potentially on track to lose roughly $4 billion per year we estimate,” Ives said.

Ives has an outperform rating on Tesla and a $250 price target. Tesla shares suffered their worst week since 2020 last week, as a high-profile investor called on Musk to name a new Tesla CEO and Musk sold $3.6 billion in Tesla stock, his second large sale of shares in a little more than a month.

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

Meanwhile, Sen. Elizabeth Warren called on Tesla’s Chair Robyn Denholm to address concerns that the board has failed to meet its legal duties in not addressing its CEO’s behavior.

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

Tesla shares bounced between losses and gains Monday and were last up 2%, as the S&P 500 index
slipped 0.6% and the tech-heavy Nasdaq Composite Index
declined 1.1%. Tesla shares are down 56% year to date, compared with a 20% fall on the S&P 500 and a 32% drop on the Nasdaq.

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


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