Renowned investor Ross Gerber has sounded the alarm on Tesla’s recent stock plummet, insisting that either CEO Elon Musk must alter his approach or face potential replacement to reverse the company’s fortunes, as reported by Yahoo Finance.
Gerber emphasized, “This could turn around very quickly if either Tesla gets a real CEO who’s actually going to help the company, or Elon changes his tune and actually comes back to working at Tesla and promoting the brand in a positive way.”
The electric vehicle giant has witnessed a stark decline of over 36% year-to-date, a downward spiral attributed to underwhelming earnings, a lackluster product portfolio, and broader market challenges.
Adding to the gloom, Wells Fargo reduced Tesla’s price target to $125 per share on Monday, indicating a potential 23% decrease from current levels. The bank depicted Tesla as a “growth company with no growth,” forecasting earnings per share to fall 32% below estimates for the year.
For investors like Gerber, dissatisfaction with Musk’s leadership and public conduct has reached a tipping point. Criticism escalated following Musk’s recent acquisition of X, previously Twitter, which stirred controversy.
While Musk’s past tweets on Tesla were lauded for their marketing value, recent behavior on social media has become a liability for the carmaker, Gerber argued. Particularly noteworthy was Musk’s engagement with an anti-semitic post last November, prompting Gerber to announce his intention to replace his Tesla Model Y with a Rivian, a competitor.
“I think investors have had enough, and we see the fallacy in this business model now, where the king of advertising the brand is now the devil of advertising the brand, basically,” Gerber lamented during an interview with Yahoo on Thursday.
Compounding concerns are Musk’s divergent focus on separate artificial intelligence initiatives, diverting attention from Tesla’s core objectives and impeding its technological supremacy.
On the flip side, Tesla enthusiast Dan Ives of Wedbush Securities believes that investor pessimism may be excessive, suggesting a potential 77% stock rebound within 12 months. However, Ives stressed the need for enhancements to Musk’s compensation package and increased control of shares to facilitate this turnaround.
