One of Elon Musk’s staunchest supporters says it’s time for some “tough love” and is growing impatient with the multibillionaire businessman.
One of Tesla’s most vocal and long-standing bulls, Wedbush tech analyst Dan Ives, broke with his customary upbeat outlook on Tuesday and wrote an extremely pessimistic letter to Tesla investors. Ives cautioned that investor patience is “wearing very thin” in the wake of Musk’s political escapade and the ensuing reaction it has caused to the brand, even if he kept his “outperform” rating on the stock.
According to Ives, Musk is “showing no attention to Tesla during this turbulent time” when demonstrators are damaging Tesla stores and dealerships or when buyers are liquidating their cars. According to Ives, Musk and Tesla are about to face a “moment of truth,” and how he responds to the coming months will be “critical.”
Even just one day before, Ives had predicted that Tesla’s ruthless 15% selloff on Monday would presage “the start of the biggest innovation and technology cycle in Tesla’s history.” This marked a significant shift in tone.
Musk, meanwhile, hasn’t done much to reassure investors in the electric vehicle manufacturer in the day since Tesla’s stock fell on Monday. On Fox News, he acknowledged that he was managing all of his enterprises “with great difficulty” and stated that he intended to remain with the Trump Administration for an additional year. On Tuesday, Musk and Trump posed for pictures on the White House lawn in front of a Tesla Model S that the president had declared he would buy. At about the same time, a group of state senators from New York wrote to the comptroller, urging the state pension fund to sell its Tesla shares.
In an interview with Fortune, Ives states that “becoming a political object is a dangerous path.”
Although Musk’s part-time management of several businesses, such as SpaceX, the X social network (previously Twitter), and X.AI, has long irritated investors, his entry into partisan politics has increased those worries and damaged the billionaire’s reputation. According to Ives, Musk has not been “reading the room” with his investors or on social media. In an attempt to attract Musk’s attention, he sent out a rare letter that was similar to some of the ones he sent out when Musk was purchasing Twitter in 2022.
After many years of covering Tesla, I felt it was time to let Musk and the board know what the company’s shareholders are telling us: balance your time. Ives adds, “Now is not the time to just play in the DOGE sandbox. Show that you are Tesla CEO.” He must take charge.
Ives is especially worried about the brand’s decline, which he claims has been “contained” up to this point but has the potential to spread.
Tesla was up 3.8% at $230.58 at the end of Tuesday’s regular trading session, but it was still far below its 52-week high of $488.54.
In a year, Ives predicts that Tesla shares will be worth $550, more than double their present price. He has kept his “outperform” rating for the stock. All of that, however, might depend on whether Musk stays in the White House and Mar-a-Lago or if he returns to Tesla’s factories and manufacturing facilities.
Ives declared, “Investors have had enough.” “Even though Musk is not the CEO of DOGE, they own Tesla because of him.”
Correction: A prior version of this story misreported Tesla’s stock performance on Tuesday due to an editing error. At the end of Tuesday’s normal trading session, Tesla’s stock was up 3.8%.
