“Don’t get too irritated by the madness of the stock market. If we continue to perform excellently, the market will recognize it,” Musk wrote in an email to employees on Wednesday. He firmly believes that Tesla will become the most valuable company in the world in the long term. Musk urged employees to move forward with vehicle deliveries through the end of the quarter. “Please go all out in the next few days and help with delivery if possible. It will make a real difference.” Tesla is offering its models in the US and China at a reduced price until the end of the year.
The electric car pioneer’s shares recovered on Wednesday after falling 11 percent to a two-year low the previous day. Investors feared a drop in demand because, according to internal plans, the lines at the Tesla plant in Shanghai are to stand still for almost two weeks in January. Some investors also feared that the Twitter acquisition could distract Musk from Tesla.
Tesla shares are recovering – and Morgan Stanley is optimistic
Tesla shares continued Thursday’s delicate recovery from the previous day. In this context, stockbrokers referred to a motivational email from the Tesla boss Elon Musk to its employees and to a positive analyst study. In NASDAQ trading, the electric car maker’s shares closed 8.08 percent higher at $121.82.
On Wednesday, after seven loss-making trading days in a row, they had stopped their descent for the time being and ultimately rose by 3.3 percent. At the start of trading, however, they had reached their lowest level since August 2020 at $ 108.24 and thus lost more than 44 percent in December alone. Since the beginning of the year, the price drop has totaled 68 percent, making Tesla one of the biggest losers in the NASDAQ 100 in 2022.
The recent slump in prices unsettles not only the shareholders, but also the employees of the company. This is probably why Musk wanted to use an email to create more optimism among his employees and increase their motivation. “Don’t get too irritated by the madness of the stock markets. If we continue to perform excellently, the market will recognize it,” he wrote, citing an internal email, according to Reuters news agency.
Musk urged workers to accelerate delivery of the vehicles through the end of the quarter: “Please go all out in the next few days and help with the delivery if you can. It will make a real difference.” Musk wants to stop the free fall of his shares, commented capital market strategist Jürgen Molnar from the trading house RoboMarkets. “Whether Tesla’s stock market is going crazy or not, Elon Musk has done his company’s stock a disservice this year. So close to the end of the year, he’s now trying to save what can be saved,” said Molnar.
Many investors blame Musk for recently making headlines with controversial changes to the short message service Twitter and for having neglected Tesla. To finance the $44 billion Twitter takeover, which was finally completed at the end of October, the Tesla boss and major shareholder alone recently sold Tesla shares for almost $40 billion. Even Musk’s announcement before Christmas that he would probably not sell any more Tesla shares for the next two years and that he would relinquish control of Twitter as soon as he had found a suitable successor did little to appease investors.
Analyst Adam Jonas from the investment bank Morgan Stanley is of the opinion that the recent steep slide in Tesla shares holds price opportunities and is therefore sticking to his “overweight” rating. He justified this with the low valuation, the good inflow of funds, the innovations and the cost leadership of the company. The electric vehicle maker should be able to extend its lead over the competition, the expert believes. He prefers industry companies like Tesla that “have proven their scale and cost leadership across the value chain.”
Although Jonas lowered his price target from $330 to $250, he believes the shares are capable of more than doubling in the medium term. With his new target, the expert is also at the level of the average price target of 30 analysts recorded by the Bloomberg news agency. The distance between the average target and the current price has never been greater. However, due to the Christmas holidays, many analysts are only likely to adjust their valuation models to the latest developments in the new year.
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