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Tesla stock proves volatile amid TSLA bull’s cautious stance, longtime critic’s optimistic outlook

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Tesla stock (NASDAQ:TSLA) is showing its trademark volatility today, amidst a longtime bull’s more cautious stance and a surprisingly optimistic outlook from a longtime critic. Tesla shares opened at $279.68 on Tuesday’s trading, down 2.04% from Monday’s $285.50 close.

In a recent note on Tuesday, Nomura Instinet analyst Romit Shah downgraded Tesla from “Buy” to “Neutral” in a note to clients titled No Longer Investable. Shah stated in his note that he had been one of Tesla’s biggest bulls since starting his coverage of the company last October, but recent developments concerning Elon Musk have been less than encouraging, particularly regarding the CEO’s Twitter behavior.

“The issue though is the erratic behavior of CEO Elon Musk. During the second quarter, the switch seemingly flipped. This is best expressed in the number of tweets per day, which increased to 15 per day since May from four per day during the prior 18 months,” Shah wrote.

That being said, the Nomura Instinet analyst remains optimistic about the progress that Tesla as a company has accomplished with the Model 3 production ramp. Shah noted that Tesla could very well out-innovate the competition, and the company may eventually become much bigger than it is today, but it would be wise to remain on the sidelines until the electric car maker has better leadership.

“With the launch of the Model 3, we saw that consumers were willing to forego compelling alternatives despite extended wait times and a premium price point. Notwithstanding improving fundamentals, we believe that Tesla is in need of better leadership (an about-face) and are moving to the sidelines until we see what happens with management,” Shah wrote.

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With his recent note, the Nomura Instinet analyst opted to cut Tesla’s price target from $400 to $300.

In what could only be described as a dash of irony, Tesla recently received an optimistic outlook from a longtime critic as well. In a note published on Monday, Bernstein analyst Toni Sacconaghi stated that TSLA shares would likely bounce back up after the company’s recent drops. Sacconaghi, who has been a vocal critic of Tesla in the past (he is also one of the two analysts that caught Elon Musk’s ire during the now-infamous Q1 2018 earnings call), stated that whenever the company’s shares dipped below $300, it became an “attractive” entry point for investors.

“We see the current dip in Tesla’s stock as analogous to prior trading opportunities, which have tended to arise when the stock falls below ~$300 per share. We think the setup in sentiment looks relatively favorable for the next few weeks. We now see the near-term risk-reward for Tesla as relatively skewed to the upside, given the potential for the stock to revert towards the middle of its $270 to $370 range,” the analyst wrote.

Sacconaghi also noted that behind the noise from the controversies surrounding Elon Musk, Tesla itself appears to be on track for its Model 3 goals this quarter.

“However, it is unclear to us that any of these are deal breakers for the stock. There has been little incremental news about Tesla’s fundamentals. The company appears to remain on track to meet its Model 3 production guidance,” Sacconaghi wrote.

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With less than three weeks before the end of September, Tesla is now in full throttle as it attempts to reach its target of producing a total of 50,000-55,000 Model 3 this quarter. Elon Musk appears to be confident of the company’s chances this Q3, as revealed in a letter to employees shared in Tesla’s official blog last Friday. In the letter, Musk noted that Tesla is poised to have the “most amazing quarter” in its history, and it is about to build and deliver “more than twice as many cars” as it did in Q2 2018.

As of writing, Tesla shares are trading down 2.74% at $277.69 per share.

Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours. 

Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

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Investor's Corner

Shareholder group urges Nasdaq probe into Elon Musk’s Tesla 2025 CEO Interim Award

The SOC Investment Group represents pension funds tied to more than two million union members, many of whom hold shares in TSLA.

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Credit: xAI/X

An investment group is urging Nasdaq to investigate Tesla (NASDAQ:TSLA) over its recent $29 billion equity award for CEO Elon Musk. 

The SOC Investment Group, which represents pension funds tied to more than two million union members—many of whom hold shares in TSLA—sent a letter to the exchange citing “serious concerns” that the package sidestepped shareholder approval and violated compensation rules.

Concerns over Tesla’s 2025 CEO Interim Award

In its August 19 letter to Nasdaq enforcement chief Erik Wittman, SOC alleged that Tesla’s board improperly granted Musk a “2025 CEO Interim Award” under the company’s 2019 Equity Incentive Plan. That plan, the group noted, explicitly excluded Musk when it was approved by shareholders. SOC argued that the new equity grant effectively expanded the plan to cover Musk, a material change that should have required a shareholder vote under Nasdaq rules.

The $29 billion package was designed to replace Musk’s overturned $56 billion award from 2018, which the Delaware Chancery Court struck down, prompting Tesla to file an appeal to the Delaware Supreme Court. The interim award contains restrictions: Musk must remain in a leadership role until August 2027, and vested shares cannot be sold until 2030, as per a Yahoo Finance report.

Even so, critics such as SOC have argued that the plan does not have of performance targets, calling it a “fog-the-mirror” award. This means that “If you’re around and have enough breath left in you to fog the mirror, you get them,” stated Brian Dunn, the director of the Institute for Comprehension Studies at Cornell University.

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SOC’s Tesla concerns beyond Elon Musk

SOC’s concerns extend beyond the mechanics of Musk’s pay. The group has long questioned the independence of Tesla’s board, opposing the reelection of directors such as Kimbal Musk and James Murdoch. It has also urged regulators to review Tesla’s governance practices, including past proposals to shrink the board. 

SOC has also joined initiatives calling for Tesla to adopt comprehensive labor rights policies, including noninterference with worker organizing and compliance with global labor standards. The investment group has also been involved in webinars and resolutions highlighting the risks related to Tesla’s approach to unions, as well as labor issues across several countries.

Tesla has not yet publicly responded to SOC’s latest letter, nor to requests for comment.

The SOC’s letter can be viewed below.

Nasdaq+Letter Tsla Socig Final by Simon Alvarez

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Investor's Corner

Tesla investors may be in for a big surprise

All signs point toward a strong quarter for Tesla in terms of deliveries. Investors could be in for a surprise.

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(Credit: Tesla)

Tesla investors have plenty of things to be ecstatic about, considering the company’s confidence in autonomy, AI, robotics, cars, and energy. However, many of them may be in for a big surprise as the end of the $7,500 EV tax credit nears. On September 30, it will be gone for good.

This has put some skepticism in the minds of some investors: the lack of a $7,500 discount for buying a clean energy vehicle may deter many people from affording Tesla’s industry-leading EVs.

Tesla warns consumers of huge, time-sensitive change coming soon

The focus on quarterly deliveries, while potentially waning in terms of importance to the future, is still a big indicator of demand, at least as of now. Of course, there are other factors, most of them economic.

The big push to make the most of the final quarter of the EV tax credit is evident, as Tesla is reminding consumers on social media platforms and through email communications that the $7,500 discount will not be here forever. It will be gone sooner rather than later.

It appears the push to maximize sales this quarter before having to assess how much they will be impacted by the tax credit’s removal is working.

Delivery Wait Time Increases

Wait times for Tesla vehicles are increasing due to what appears to be increased demand for the company’s vehicles. Recently, Model Y delivery wait times were increased from 1-3 weeks to 4-6 weeks.

This puts extra pressure on consumers to pull the trigger on an order, as delivery must be completed by the cutoff date of September 30.

Delivery wait times may have gone up due to an increase in demand as consumers push to make a purchase before losing that $7,500 discount.

More People are Ordering

A post on X by notable Tesla influencer Sawyer Merritt anecdotally shows he has been receiving more DMs than normal from people stating that they’re ordering vehicles before the end of the tax credit:

It’s not necessarily a confirmation of more orders, but it could be an indication that things are certainly looking that way.

Why Investors Could Be Surprised

Tesla investors could see some positive movement in stock price following the release of the Q3 delivery report, especially if all signs point to increased demand this quarter.

We reported previously that this could end up being a very strong rebounding quarter for Tesla, with so many people taking advantage of the tax credit.

Whether the delivery figures will be higher than normal remains to be seen. But all indications seem to point to Q3 being a very strong quarter for Tesla.

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Elon Musk

Tesla bear Guggenheim sees nearly 50% drop off in stock price in new note

Tesla bear Guggenheim does not see any upside in Robotaxi.

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tesla showroom
Credit: Tesla

Tesla bear Guggenheim is still among the biggest non-believers in the company’s overall mission and its devotion to solving self-driving.

In a new note to investors on Thursday, analyst Ronald Jewsikow reiterated his price target of $175, a nearly 50 percent drop off, with a ‘Sell’ rating, all based on skepticism regarding Tesla’s execution of the Robotaxi platform.

A few days ago, Tesla CEO Elon Musk said the company’s Robotaxi platform would open to the public in September, offering driverless rides to anyone in the Austin area within its geofence, which is roughly 90 square miles large.

Tesla CEO Elon Musk confirms Robotaxi is opening to the public: here’s when

However, Jewsikow’s skepticism regarding this timeline has to do with what’s going on inside of the vehicles. The analyst was willing to give props to Robotaxi, saying that Musk’s estimation of a September public launch would be a “key step” in offering the service to a broader population.

Where Jewsikow’s real issue lies is with Tesla’s lack of transparency on the Safety Monitors, and how bulls are willing to overlook their importance.

Much of this bullish mentality comes from the fact that the Monitors are not sitting in the driver’s seat, and they don’t have anything to do with the overall operation of the vehicle.

Musk also said last month that reducing Safety Monitors could come “in a month or two.”

Instead, they’re just there to make sure everything runs smoothly.

Jewsikow said:

“While safety drivers will remain, and no timeline has been provided for their removal, bulls have been willing to overlook the optics of safety drivers in TSLA vehicles, and we see no reason why that would change now.”

He also commented on Musk’s recent indication that Tesla was working on a 10x parameter count that could help make Full Self-Driving even more accurate. It could be one of the pieces to Tesla solving autonomy.

Jewsikow added:

“Perhaps most importantly for investors bullish on TSLA for the fleet of potential FSD-enabled vehicles today, the 10x higher parameter count will be able to run on the current generation of FSD hardware and inference compute.”

Elon Musk teases crazy new Tesla FSD model: here’s when it’s coming

Tesla shares are down just about 2 percent today, trading at $332.47.

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