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HomeMarketTesla's Brand Is Suffering as Elon Musk Tries to Save Civilization

Tesla’s Brand Is Suffering as Elon Musk Tries to Save Civilization

The Tesla Model Y, left, and the Tesla Model 3 are unveiled at a launch event in Bangkok last week.

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Lillian Suwanrumpha/Getty Images

Tesla
‘s brand image is in the red, just like
Tesla
stock.

How consumers see Tesla (ticker: TSLA) looks to be suffering as Elon Musk tries to put his stamp on Twitter. Tesla investors will have to decide if any effects from his acquisition of the social-media company, and his effort to overhaul it, will be a continuing problem for the EV manufacturer.

Survey firm YouGov.com says that negative opinions of Tesla’s brand now top positive views by a hair. Tesla’s net positive score—essentially positive opinions minus negative ones—dipped below zero at the start of December.

YouGov didn’t immediately respond to a request for comment about its polling.

Twitter is the most likely cause of the slide. Musk’s tweets have become increasingly political. Last week, Musk tweeted several times about issues ranging from election interference by Twitter to disapproval of the Federal Reserve’s interest-rate policy and claims of media bias.

Sunday, Musk answered a follower suggesting he is erring by “getting too political” with a tweet saying it “must be done for the future of civilization, without which nothing matters.”

Musk and Twitter didn’t immediately respond to requests for comment about the tweet, the survey, or plans to remake the social-media platform.

Musk paid roughly $45 billion for Twitter, taking the company private, so any decline in the value of Twitter mainly hurts the Tesla CEO. The public investors hurting from any Twitter fallout are Tesla shareholders. Tesla stock is off about 20% since Musk completed the Twitter purchase. Shares have underperformed the
Nasdaq Composite
by about 22 percentage points over the same span.

If Tesla stock had performed in line with other auto stocks over that period, shares would be at roughly $225, but they closed on Friday at just over $179.

The effect on Tesla’s brand is getting noticed by Wall Street. “Impact on brand perception in the general public is visible and material,” wrote New Street Research analyst Pierre Ferragu on Friday. He is still positive on Tesla stock, though, adding that it isn’t likely to affect car-buying buying behavior in the near term.

He rates Tesla stock at Buy, with a target of $530 for the price, according to FactSet. Investors no doubt hope Ferragu is right.

His price target is the highest on Wall Street. The average analyst call is about $288 a share. About 63% of analysts covering Tesla stock rate shares Buy, while the average Buy-rating ratio for stocks in the S&P 500 is about 58%.

Tesla stock was down 3.6% at $172.59 Monday morning. The
S&P 500
and
Dow Jones Industrial Average
were 0.3% and 0.2%, respectively.

Write to Al Root at allen.root@dowjones.com


Credit: marketwatch.com

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