Today, the share price of Tesla was set rocking by a downgrade of an investment bank. The “erratic behaviour” of Elon Musk, the chief executive of the company, was cited as the reason for the adjustment of the prices.
The shares of Tesla dropped by nearly four percent to $274.14 after Nomura lowered its target price in the wake of Musk making yet further headlines with his behaviour including the incident when he smoke weed while broadcasting live on the internet.
Nomura’s Romit Shah withdrew his ‘buy’ rating despite disclosing that Tesla continued to be positioned to deliver “unprecedented” growth in terms of revenue.
In a note to investors, he wrote: “We have been one of the most bullish on TSLA shares since initiating coverage last October.”
He added: “We continue to believe that Tesla could be a lot bigger than it is today.”
He continued: “The issue though is the erratic behaviour of CEO Elon Musk. During the second quarter, the switch seemingly flipped.”
Romit Shah cited the regular tweets of Musk, as well as his appearance on the podcast of Joe Rogan, a comedian, during the past week, where he appeared to smoke weed.
Shah added that his interview with the New York Times, his accusation that a diver who was involved in rescuing the Thai boys that were trapped in a cave is a paedophile – which has resulting in a lawsuit from the diver in question – and his abrupt announcement of plan to take the company private which was subsequently abandoned “likely contributed to the onslaught of executive departures in recent months.”
Last week, Dave Morton, the Chief accounting officer of Tesla, resigned after only a month in the role. It was followed by the resignation of Gaby Toledano, the company’s HR chief.
It comes as Musk attempts to increase the production of its vehicles, saying that Tesla will drop some colour options from its electric car line-up in an effort to “simplify manufacturing.”
The electric carmaker has scrapped two of its seven paint options as it experiences heightening pressure to increase its production.
Last July, the firm was able to meet a self-imposed target of producing 5,000 Model 3 cars per week – after missing its production targets in the last quarters.
Last week, Elon Musk predicted that Tesla was set for its “most amazing quarter in history” in the third quarter. He said that they will be building more than twice as many cars as the second quarter.
According to its latest quarterly results, the company produced 53,339 vehicles during the second quarter and delivered 40,768.
Musk stated: “Moving two of seven colours off the menu on Wednesday to simplify manufacturing.
He added: “Obsidian black and metallic silver will still be available as special request but at a higher price.”