Tesla shares closed lower in the US Tuesday, as a Fund Manager called the company a ‘hope stock’. The Tesla stock has lost ground during an uncertain period where CEO Elon Musk shared a potential plan for taking the business private, before making a U-Turn and saying the company will continue as a publicly-listed one.
Tesla shares ended the US Tuesday trading session 2.32% lower at $311.86. The stock has moved as high as $379 earlier this month, after Musk suggested shares would be valued at $420 to become a private company.
Little hope for Tesla
US Fund Manager Peter Toogood, told CNBC Tuesday, that Tesla was a “hope stock” and that the only hope for the company was in its autonomous driving technology.
“Are we living in the real world? Tesla is just another one of those hope stocks,” The Embark Group’s chief investment officer Toogood told CNBC’s Squawk Box Europe, Tuesday.
“The only bit that has got hope is the autonomous driving,” Toogood said. “(But) the idea to compete on a platform basis with cars; it's losing money every time it sells one,” he added.
Toogood’s criticism of Musk’s company includes the fact that not only is it an expensive vehicle to make, buts its also very difficult to service them, particularly in some countries, including Norway.
“Ask Norway, they can't actually get the car serviced because there's no network to service them. It's just not real,” he added.
Analysts cut Tesla price target
Toogood’s comments on Tesla comes as analysts said Musk’s quickly changing outlook for the company are hurting its credibility. And, following Musk’s announcement that the firm would not go private, Canaccord Genuity reduced its price target on the stock.
The research firm cut its Tesla 12-month price target to $316 from $336.
“What was at best a premature announcement has generated three weeks of distraction from one of Tesla's most important quarters to date,” analyst Jed Dorsheimer said in a note to clients. “We feel less confident in the company's ability to meet it's 50,000 to 55,000 production guidance.”