Tesla is no longer a top stock, tech firm Wedbush Securities said Thursday, via one of its analysts, Daniel Ives.
“Musk has essentially tarnished the Tesla story/stock and is starting to potentially impact the Tesla brand with this ongoing Twitter train wreck disaster,” he wrote in an email for clients.
Wedbush’s top stock list is also known as its “Best Ideas list.” In it, its analysts across various verticals like tech and retail pick their favorite stocks and update them periodically. Ives is a tech analyst at the firm and covers companies like Lyft and Tesla.
As far as why Tesla has been booted, it’s a story that begins with Twitter. Musk moved to buy Twitter in April, then backed out, and then finalized the deal for about $44 billion in late October. This week, Musk sold nearly $4 billion worth, aka, 19.5 billion shares, of Tesla stock. It’s unclear why, but it is likely it has something to do with the Twitter deal.
Musk is “using Tesla as an ATM machine,” Ives said in an appearance on Yahoo Finance on Friday morning.
Related: Elon Musk Tells Twitter Employees That Bankruptcy Is Not Out of the Question, Bans Remote Work
And, by proxy, Tesla has been struggling, Ives argued. Though there are larger economic headwinds since the Fed has been raising interest rates to combat inflation, Tesla has seen its stock go down by 50% since April, when Musk first started making noise about Twitter.
Combined with stock selling and “the fear that this Twitter lightening rod of controversy on a daily (almost hourly) basis starts to negatively change the Tesla brand globally,” Ives wrote.
Ives also lowered the target price of the stock to $250 from $300. Target stock prices are developed by analysts based on knowledge of the company from public filings and past earnings. Generally speaking, when an analyst like Ives raises a target price, the company’s stock goes up, and vice versa.
As of Friday morning, Tesla is trading at $189. Musk needs “refocus back on the golden, child Tesla,” he said on Yahoo Finance.
He also equated the company to Steve Jobs’s iPhone.
“Love him or hate him it was hard to deny Musk’s grit and strategic vision around the Tesla story which again and again were massively successful over the years despite enormous challenges,” Ives added in his note.