Tesla’s share price collapse has been “one for the history books” – and more bloodletting is likely.
Shares have more than halved since peaking at $488 in December, erasing some $800 billion (€737 billion) in market capitalisation, prompting JPMorgan to say it struggled “to think of anything analogous in the history of the automotive industry, in which a brand has lost so much value so quickly”.
Far from the selling being overdone, JPMorgan slashed its price target for Tesla to $120, suggesting another halving is coming. It also cut its forecast for Tesla’s first-quarter deliveries, from 444,000 to 355,000.
Pessimistic? Yes – JPMorgan’s price target is the lowest on Wall Street. Its deliveries estimate is also well below consensus. Still, Tesla still looks expensive by conventional valuation metrics. Secondly, recent sales figures have been dire.
Australia is the latest country to turn against Tesla, with sales collapsing 71 per cent in February.
Who is to blame for the so-called “Tesla Chainsaw Massacre”? Elon Musk isn’t happy with George Soros and LinkedIn co-founder Reid Hoffman, suggesting the two billionaires are funding anti-Tesla protests.
Of course, the real architect of Tesla’s woes isn’t Soros or Hoffman – it’s Elon Musk. As Hoffman says, it’s easier to “explain away” people’s anger “than to accept that actions have consequences”.
