Tesla, Inc. (NASDAQ:TSLA) shares have recently been on a slide and two of the biggest bulls of the EV giant recently weighed in on what is ailing the stock.
Short-Term Focus Confounds Analyst:”Neither Elon Musk’s political rants nor his canceled cage fight with Meta CEO Mark Zuckerberg has caused the slump seen in Tesla stock over the past month,” said Future Fund’s Gary Black in a post on X, formerly Twitter.
The threat of price cuts is weighing down on the stock, the analyst said. Sentiment toward the stock began to take a turn for the worse after Musk said on the second-quarter earnings call that if interest rates keep rising, he would have to cut EV prices further, he noted.
Since then, Tesla has lost 23% vis-à-vis the Nasdaq 100’s 6% pullback. “On earnings day, TSLA seemingly snatched defeat from the jaws of victory with $TSLA -10% despite otherwise strong earnings,” he said.
Black harped on Tesla not spending on advertisements to educate potential EV consumers and instead preferred price cuts as a strategy to push volume. To make his case, he noted that Apple does not cut prices of its iPhones when volume comes to light.
He also brought up the irony of Tesla resorting to the shortest-term tool in the toolbox, namely price cuts to drive volume despite its strict adherence to “first principles and long-term strategic thinking.”
Table-Pounder At Current Levels: Wedbush analyst Daniel Ives, who appeared on CNBC Last Call, said he isn’t worried about the sell-off seen in the past month. “The weakness is more of a post-quarter sell-off amid worries about China,” said Ives.
The analyst sees Tesla’s price cuts as a poker move for Tesla and Musk and more of an opportunity for the company, especially going into the next year and with the launch of the Cybertruck.
“It’s a table-pounder at these levels,” he said.
In premarket trading, Tesla was edging up 0.44% at $226.59, according to Zenger News Pro data.
© 2023 Zenger News.com. Zenger News does not provide investment advice. All rights reserved.
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Edited by Judy J. Rotich and Newsdesk Manager
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