Elon Musk’s dealing with of Twitter is damaging sentiment round Tesla , in response to Oppenheimer. Analyst Colin Rusch downgraded shares of Tesla to carry out from outperform, saying he can not separate protection of the electrical automobile maker from Musk’s controversial administration of the social media platform. “While we continue to see Tesla evolving EV and autonomous technology in advance of peers and driving costs to levels those peers will struggle to match—and have tried to separate Elon Musk’s non-Tesla endeavors (personal and professional) from our analysis on TSLA—we believe Mr. Musk’s acquisition and subsequent management of Twitter now make that separation untenable,” Rusch wrote in a Monday notice. “The combination of Twitter’s unclear cash needs and diminishing options for Mr. Musk to serve those needs amid the broad public backlash driven by inconsistent standards application for Twitter users, notably banning select journalists, is pushing us to the sidelines on TSLA,” he added. Tesla shares, that are notably risky, are down 57% this yr. However, the analyst expects that the continued destructive headlines round Twitter might create a “negative feedback loop” that will damage gross sales of Tesla automobiles. “[We] believe banning journalists without consistent defensible standards or clear communication in an environment where many people believe free speech is at risk is too much for a majority of consumers to continue supporting Mr. Musk/TSLA, particularly people ideologically aligned with climate change mitigation,” Rusch stated. The analyst eliminated his value goal of $436 value goal on Tesla. Shares of Tesla closed at $150.23 on Friday. “We believe increasing negative sentiment on Twitter could linger long term, limiting its financial performance and become an ongoing overhang on TSLA,” Rusch wrote. To ensure, Musk performed a ballot Sunday asking Twitter customers whether or not he ought to step down, with most respondents voting sure . Musk stated there isn’t any successor in place in the mean time. Tesla shares jumped 4% within the premarket. —CNBC’s Michael Bloom contributed to this report.
Oppenheimer downgrades Tesla, says Elon Musk’s handling of Twitter could hurt electric vehicle maker