Achi news desk-
Billionaire electric vehicle EV maker and CEO Elon Musk has been in hot waters with its supplies plunging, market capitalization contracting, and share price falling significantly.
The turmoil in the company has not only confused Tesla investors but also the market analysts.
The Texas-based automaker’s market cap is down more than $700 billion with its share price nosediving 63% after hitting a record high of $409 in November 2021, according to estimates from Fortune.
For the first time this year, its market cap is below $500 billion.
Reports indicate that deliveries have also been low since the end of Covid-19, and the 52-year-old CEO recently announced in a memo to lay off over 10% of the company’s global workforce.
Analyzing the bumpy ride, Wedbush Securities’ Dan Ives said CNBC while Musk deserves the big pay packet, he is facing a “fork in the road” and needs to turn things around.
“This is something that has gone from a Cinderella story to, in the near term, a horror show,” said Ives.
Tesla’s purpose was to develop a new era of EV but it is said to have been clouded by the competition from BYD China.
Tesla stock was down 3.5% at around $149 on Thursday.
Ives urged Musk’s company to demonstrate a clear future strategy, including a roadmap for future product launches, urging the automaker to focus on its low-cost Model-2.
Deutsche Bank Thursday also downgraded Tesla stock from a buy rating to a hold rating, lowering its price target from $189 per share to $123.
Deutsche analyst Emmanuel Rosner wrote that Tesla’s future lies in “cracking the code on full driverless autonomy,” which represents a “significant technological, regulatory and operational challenge.”
“We see Tesla’s move as a change in thesis, and worry that the stock will need to undergo a potentially painful transition in the ownership base,” Rosner wrote, adding that electric vehicle investors may begin to “throw in the towel in” and be replaced “by AI / technology investors. with much longer time horizons.”
