Elon Musk is 'asleep at the wheel' at a pivotal moment for Tesla and has lost credibility, Wedbush's Dan Ives says
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- Elon Musk's preoccupation drew more criticism from Wedbush analyst Dan Ives on Friday.
- Ives wrote in a Friday note that Musk is now viewed as "asleep at the wheel."
- He added that "Musk has lost credibility with the broader investment community."
Tesla CEO Elon Musk's preoccupation with Twitter is leaving the electric car company he founded hanging out to dry without a leader, according to Wedbush's Dan Ives.
In a Friday note, he wrote that Tesla is already facing a challenging macroeconomic environment with a potential recession on the horizon next year and additional competition that forced the firm to lower its price target on the stock to $175 from $250.
"Need a leader at this time for Tesla, not Ted Striker," Ives said, referring to a character in the movie "Airplane." "At the same time that Tesla is cutting prices and inventory is starting to build globally in face of a likely global recession, Musk is viewed as 'asleep at the wheel' from a leadership perspective for Tesla at the time investors need a CEO to navigate this Category 5 storm."
Tesla stock is in its worst sell-off since going public in 2010 and plunged below $150 per share on Wednesday, bringing the company's valuation below oil giant Exxon.
Musk has clapped back at skepticism toward the company's future, and argued that the recent lows in the stock price presents a buying opportunity while shifting the blame toward the Federal Reserve's aggressive rate hikes.
But Ives put the responsibility on Musk and attributed 70% of the Tesla's sell-off to worry over his focus on Twitter.
"In essence, Musk has lost credibility with the broader investment community as broken promises (selling stock again and again and again....), the Twitter fiasco, opening up the political firestorm on Twitter, and brand deterioration for Musk and Tesla has led to a complete debacle for the stock," he wrote.
Ives noted that Tesla still has the potential for earnings gains next year that could boost the stock, and said that if Musk refocuses back on Tesla, stops selling stock, and sets conservative 2023 guidance while the board initiates a buyback, then shares may have hit a bottom.
"Taking a step back, the long term Tesla transformational story remains intact in our opinion as the EV demand globally is set to meaningful accelerate over the coming years with Tesla the clear leader poised to benefit front and center," he said.