Tesla’s share price, having doubled after the virus-induced market slump, fell by more than 10% following the latest outburst from CEO Elon Musk (pictured). He tweeted that the electric-car maker’s stock price “is too high”, says Richard Waters in the Financial Times. This is ironic given that Musk has been engaged in a “running battle” with short-sellers who have complained “that the shares are artificially inflated”.
Musk’s decision to talk down his own company’s share price is clearly a “kick in the teeth” for investors, says Liam Denning on Bloomberg. However, he is right to stress that Tesla’s stock price is “an emotional, not financial, construct”. After all, the pandemic has piled more stress onto Tesla’s “already less-than-utility-like model”. Despite analysts’ euphoria at the “peanut-sized profits” Tesla announced in its latest earnings report last week, there are serious concerns about what the continuing suspension of activity at Tesla’s main factory in California will mean for future cash flow.
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