TESLA

Tesla's stock may fall to $ 10, says Morgan Stanley analyst

A Wall Street analyst who had a target price of $ 379 for Tesla just over a year ago held a private teleconference with investors on Wednesday to explain why he thinks the stock could now drop to $ 10 .
"Tesla was seen as a growth story," Morgan Stanley analyst Adam Jonas said in the teleconference, which was taped by Bloomberg News. "Today, supply exceeds demand, are burning cash, no one cares about Model Y, raise capital and there is no strategic buy-in. Today, Tesla is not really seen as a growth story. It is seen more as a history of distressed credit and restructuring. "
Tesla shares extended a period of losses for the sixth consecutive day, closing Wednesday with a 6% drop to $ 192.73, the lowest price since December 2016. Jonas, who has a recommendation equivalent to neutral for an automaker of Elon Musk, released a report on Tuesday stating that Tesla may have "over-saturated" the market for battery-powered electric sedans outside of China.
Representatives of Tesla and Morgan Stanley did not immediately respond to requests for comment on Jonas's long-running teleconference, which lasted nearly an hour. Morgan Stanley was one of the underwriters of Tesla's new common stock and convertible bond offerings earlier this month.
"The heart of it is in demand," Jonas said of Tesla's problems. "What has changed is demand. This is the first domino. "
Tesla delivered 63,000 cars in the first three months of the year and told shareholders it expects to deliver between 90,000 and 100,000 units in the second quarter. Jonas said the "whispered number" on Wall Street is that deliveries hit the average range of 70,000 units.
Information about the teleconference was disclosed earlier by Business Insider on Wednesday.
Jonas is still optimistic about Tesla's technology: the company's software and ability to offer over-the-air upgrades to customers; and also the hardware, recharge infrastructure and data volume that collects drivers using Autopilot.
"Car maker executives describe Tesla as the white rabbit in a dog race," said Jonas. "Every other company knows they will never catch the rabbit; they just hope to be the fastest dog. Tesla is the white rabbit, but it is tied to liabilities with actual financial liabilities and financial liabilities. How much is the rabbit worth? Bloomberg