This post was originally published on this site
https://i-invdn-com.investing.com/news/twitter_M_1440049826.jpg
Oppenheimer analysts downgraded Tesla (NASDAQ:TSLA) stock to Perform from Outperform on growing risks stemming from CEO Elon Musk’s take-private deal for Twitter.
They believe that Musk’s acquisition and subsequent management of Twitter has “severely damaged” the sentiment around Tesla stock. As a result, “any positive fundamental news near term will likely lead to select short covering followed by subsequent re-shorting.”
“We continue to anticipate TSLA’s technology position being both tested and validated during 2023, which could be outweighed by negative publicity leading to additional volatility,” they said in a downgrade note.
The downgrade move comes on the same day when Musk indicated he may step down as Twitter CEO. The billionaire conducted a poll, asking his followers if he should step down as the head of Twitter. He then admitted that he’s finding it hard to find someone to replace him and “keep Twitter alive.”
“We believe Mr. Musk is increasingly isolated as the steward of Twitter’s finances with his user management on the platform. We see potential for a negative feedback loop from departures of Twitter advertisers and users due to inconsistent standards resulting in increased financing needs that may lead to incremental TSLA sales just as Tesla’s competitive environment intensifies,” the analysts added.
They insist that their position on Tesla’s technology position remains unchanged. The analysts continue to believe the electric vehicle (EV) maker is “leveraging unparalleled expertise in EV-related materials and AI coupled with a multi-year data advantage in materials performance and self-driving to drive significant cost and performance advantages in the transportation space.”
As of 06:30 EST (11:30 GMT) Tesla stock is up 4.6% on the news Musk may quit as Twitter CEO.
