Tesla (TSLA) shares appeared to lose steam Friday morning after shareholders approved a compensation package for CEO Elon Musk worth about $46 billion at the company’s annual meeting on Thursday.
A number of analysts and Wall Street pundits have issued new, incredibly bullish predictions for EV companies, including Wedbush’s Dan Ives (whose latest prediction is that Tesla’s market cap will exceed $1 trillion in 2025) and Ark Invest (ARKK) founder, CEO, and CIO Cathie Wood (who sees Tesla’s stock price hitting $2,600 by 2029).
But not everyone shares this enthusiasm for Tesla and Elon Musk. Per Lekander, CEO and portfolio manager at Clean Energy Transition and a longtime Tesla short seller, appeared on The Morning Brief to explain his $15 price target, likening Tesla to “the next Enron.”
“You have to remember, the stock is down 60% from its all-time high, while the market is up 20 to 25% in that time,” Lekander said, citing Tesla’s earnings and the stock’s decline so far this year. “So the stock needs to go down. And once it’s down, it’s going to go down. And I think it’s earnings that are going to drag the stock down. And I think we’re very close to a tipping point, because it’s been a slippery slope before. They weren’t selling cars, so they lowered the prices, and then earnings went down…”
Lekander said Musk “missed the mark on what’s happening across the EV industry in the wake of the COVID-19 pandemic.”
For more expert insights and the latest market trends, click here to listen to this entire episode of Morning Brief.
This post was written by Luke Carberry Morgan
Check out Yahoo Finance’s coverage of Tesla, Elon Musk, and his compensation package furore.
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Elon Musk is essential to Tesla’s growth and AI: Cathie Wood
The fight over Musk’s pay isn’t over yet, and here’s why.
Is Elon Musk the right man to be Tesla’s CEO?
Musk’s compensation package: What’s driving the shareholder vote?
Elon Musk’s $46 billion Tesla compensation package: Explained
Video Transcript
Tesla shares fell slightly.
It’s just flat.
For now, the stock price is barely buoyed after shareholders reapproved Elon Musk’s multibillion-dollar compensation package.
The stock is currently down about 30% compared to last year.
Here we provide a one-year outlook and we provide a 52-week outlook for the stock.
Our next guest has been shorting the stock since he saw increased downside risk for EV makers in 2020.
Leander, CEO and Portfolio Manager of Clean Energy Transition, thank you so much for joining us on the show today, first of all, how much of a delay do you think we’re going to see?
The story continues
Yes, thank you for inviting me.
Well, in my view, Tesla is the biggest stock market bubble in the history of the world.
Well, we’ve only just seen the beginning.
Um, well, you know what?
You know, models are getting older.
Hmm, and the ratings are completely insane.
Revenues are plummeting.
I think it’s going to fall 50% this year.
Hmm, I guess so.
My income is about 140.
Well, I think the consensus this year is 265.
At the beginning of the year there were about five of us.
If you think about it, that’s $1.50.
Um, what is it?
How do you rate that?
Hmm, I think 10 times earnings is a very generous figure given the lack of growth there.
So my price target is $15.
Hmm, that being said, I think this will end up being a donut.
Because once you get to that level, there’s so many things that happen, class action lawsuits, boards, and so on, and it gets paid out to itself, it gets paid out to itself, it gets paid out to itself.
So, I think this is very dangerous and will ultimately prove to be the next General PERL.
I have so many questions.
I agree.
I’ll start with some of the concerns you raised.
These concerns have certainly not kept pace with the stock price, and the reaction to Musk’s comments last night showed some initial hope for Tesla’s growth, at least over the next few years.
My first question is how is that going to change the perception or investor thinking here, because so far some of the concerns that you’ve mentioned haven’t really been reflected in the stock price at all.
And I would say yes and no, remember that while the market is up 20-25%, stocks are down 60% from their all-time highs.
Um, in the meantime, um, um, but it’s in stages.
Where, what?
What needs to happen here, of course, is for retail traders to give up, because that’s what’s slowing down the valuation of this stock, and it just doesn’t make sense.
Now, do you think there are any retail traders out there that are going to give up on this III I. I think it’s going to be very interesting to see what that investor group has done with regards to Tesla in particular and the excitement and the broader story of Tesla.
But when it comes crashing down, everyone runs for the hills.
This means that once stock prices fall, they will fall further.
And I think the thing that’s going to bring it down is revenue.
And I think we’re very close to a tipping point, because up until now, things have been a slippery slope.
They were selling cars poorly.
They lowered the price.
So revenues went down and it became cyclical.
Now they are very close to being scrapped.
And, you know, it was actually deployed this quarter.
The interest rate on cars is close to 0%.
Hmm, once the Q2 results come out.
You see, Q a’s delivery was terrible, but the actual revenue wasn’t that bad.
Um, so in the second quarter, everything is being done to ship cars and things are going relatively well.
So deliveries are going to be okay, not great, but revenue on July 25th is going to be absolutely terrible.
The company may incur losses.
And if they’re in the red in the first quarter and they continue to be in the red in the third quarter, which is certainly going to be a double-digit deficit, I think that’s going to drive a lot of fans away.
Now, at 2:30 pm we will be speaking with Dan Ives, analyst and managing director at Wedbush Securities.
In fact, this is what he said about the future of EV manufacturers: And I’d love to hear your responses on the other side as well.
But that’s 34 million vehicle trips per year.
Looking four or five years into the future, betting on Musk again would have been a wrong move.
And I think this was obviously a tumultuous time.
But come 2025, I think there’s a chance the Cinderella story could happen again.
Now, you’re saying there’s clearly a reason to bet on Musk, but whether or not retail is the only proponent of the stock, it seems like at least a lot of shareholders at this point believe there’s a reason to bet on Musk.
With Musk at the helm, do you think the company will ultimately get closer to the goals you have set for it?
So?
so what?
I think what he’s missing is what’s going on across the EV industry.
Well, I had to back off a little bit.
Well, we’re out of COVID.
Well, the auto industry was constrained.
Some people were early buyers of EVs.
You made a big profit.
Well, Tesla was a near monopoly, so they made a ton of money from this.
And when things are going really well, of course, everyone comes together.
So all the traditional automakers are getting in and these models are starting to come out.
In 2025, 24 more will come.
Tesla has none.
So I would say there is a real cycle going on in Eris.
Nobody is a battery.
Uh, producers, auto producers, lithium miners.
No one will be making money over the next few years and Tesla will fall from leader to laggard.
So, um, you can’t have a stock with a market cap of $500 billion without having profits.
And in the past that wasn’t the case.
So I’m very confident.
So, um, what are you listening to?
GM is against Mercedes.
What does eBay say?
They’re not making money and things are going to get worse before they get better.
There is.
It’s a long story, but the story is told by 2728 Pearl Lekander, CEO and Portfolio Manager of Clean Energy Transition.
Thank you for sharing your thoughts here today.
I appreciate it
thank you.
