Pro: Tesla stock is not a ‘buy’ even if Musk quits Twitter

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Written on Dec 20, 2022

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CNBC report says Elon Musk is actively looking for a new Twitter CEO.
GLJ Research's Johnson reiterates his bearish stance on Tesla Inc.
Tesla stock is now down nearly 65% versus the start of the year 2022.

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Tesla Inc (NASDAQ: TSLA) remained in the headlines this morning following a CNBC report that Elon Musk is actively looking for a new Chief Executive to run Twitter.

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Tesla stock is still not worth buying

That’s a bit of a relief since many attributed part of the recent sell-off in shares of Tesla Inc to him overspending time in running the troubled social network.

Still, Gordon Johnson of GLJ Research reiterates that the stock is not worth buying even without the Twitter noise because the said weakness is more company specific.

You’re talking about a company engaging in margin slashing price cuts – it’s a car company that has built too much capacity that they can’t sell. Yet, it’s valued at more than the next four largest automakers combined.

For the year, Tesla stock is down nearly 65% for the year.

Tesla can’t sell what it’s producing

Tesla produced more vehicles than it sold in each of its past three quarters even though its factories are not operating at full capacities – and Johnson expects that trend to continue moving forward. On CNBC’s “Squawk Box”, he noted:

I think that when you see the fourth-quarter delivery numbers and more importantly, when you see the first-quarter delivery numbers, the stock’s going to come under tremendous pressure.

Currently, the electric vehicles manufacturer has its order backlog under 200,000 units versus 2.5 times about six months ago.

In total Elon Musk has sold nearly $23 billion worth of Tesla stock this year to fund his $44 billion takeover of Twitter Inc.