Tesla (NASDAQ: TSLA) bulls are conflicted about the automaker’s forecast and outlook as CEO Elon Musk’s “circus” with Twitter continues.
While some Tesla bulls have continued to solidify themselves as ultimate believers in the automaker’s future, establishing distinct and robust predictions for the stock, the near-term is much different. Some bulls are remaining supportive of Musk through his venture with Twitter, while other analysts who have been proponents of investors putting their money with Tesla are backtracking.
Ron Baron of Baron Capital is one bull whose overall outlook on Tesla stock has changed very little. Baron has supported Tesla and Musk’s vision for several years, with Baron Capital being one of the biggest Tesla bulls on Wall Street. Ron Baron is also a Tesla shareholder in his own right. While his firm was forced to sell Tesla shares several years ago amid its baffling climb to a trillion-dollar valuation to keep diversification level, he refuses to sell any personally held stock.
Recently, Baron sat down with Musk to dissect his mind as the Twitter saga continued on. Afterward, he gave an interview with Forbes, where he solidified his position on Tesla. “In ten years, Tesla will be the largest and most profitable company in the world,” he said. Baron does not only believe in Tesla but also Musk’s aerospace company SpaceX, which is privatized but available for select investors to buy. He said he scoops up more shares anytime they’re available.
Baron’s outlook on Tesla’s 50 percent drop from last year is that it is just another buying opportunity for investors. Just because Tesla is down significantly this year, it is not an anomaly. “Stocks are dirt cheap on an absolute basis,” he said.
Other analysts are not as encouraged by recent developments. Wedbush’s Dan Ives recently removed Tesla from the firm’s “Best Ideas” list following a downturn in the stock’s short-term outlook. Long-term, Ives still believes the Tesla story remains unchanged, which aligns with most Tesla bulls’ mentality. However, he is beginning to worry about brand deterioration as a result of Musk’s Twitter deal and believes the entire show has gotten worse.
“Ultimately, this circus show has not gotten better. It’s gotten worse since Musk took over Twitter. We’ve seen that the last few weeks and my issue is more about brand deterioration for Tesla.” he said to CNN. “Musk is so associated with Tesla, with the premium that the stock gets. That’s been a bit of our concern. Also, just his attention, it’s going to be a tough juggling act here.”
Ives recently called Twitter a “money pit” and a black eye for Tesla stock. Musk is undoubtedly a big part of the Tesla brand. If you were to walk up to ten people on the street and ask them the CEOs of Tesla, Ford, and GM, many would likely be able to say Elon Musk, but very few would know Jim Farley and Mary Barra if they are not interested in the automotive sector.
Tesla stock remains in a strange predicament due to Musk’s Twitter ordeal. The stock is down 1.6 percent on the day and over 18 percent in the past 30 days. Nevertheless, the long-term story of Tesla seems to be unchanged for many analysts. It is just the near term where industry professionals are struggling to agree.
Disclosure: Joey Klender is a TSLA Shareholder.