An influential Wall Street analyst who had a price target as high as $379 on Tesla Inc. a little more than a year ago held a private call with investors Wednesday to elaborate on why he thinks the stock may now be headed for as low as $10.
“Tesla was seen as a growth story,” Morgan Stanley analyst Adam Jonas said on the call, a recording of which was obtained by Bloomberg News. “Today, supply exceeds demand, they are burning cash, nobody cares about the Model Y, they raise capital and there’s no strategic buy-in. Today, Tesla is not really seen as a growth story. It’s seen more as a distressed credit and restructuring story.”
Tesla shares extended a streak of declines to a sixth consecutive day, closing down 6 percent to $192.73, the lowest since December 2016. The shares began rising this morning after CEO Elon Musk predicted in an email that second-quarter deliveries would hit a new record. The stock rose 1.4 percent to close the day at $195.49.
Jonas, who rates the carmaker the equivalent of a hold, issued a report Tuesday saying that Tesla may have “over-saturated” the market for battery-electric sedans outside of China.
Representatives for Tesla and Morgan Stanley didn’t immediately respond to requests for comment on Jonas’ wide-ranging and nearly hour-long call. Morgan Stanley was among the underwriters for Tesla’s offerings of new common stock and convertible bonds earlier this month.
“At the heart of this is demand,” Jonas said of Tesla’s woes. “What is changed is demand. That is the first domino.”