TSLA: Analyst Raises Concerns Over Musk's OpenAI Bid and Political Involvement
Market Impact:
Tesla's (TSLA) stock declined 6% on Tuesday following concerns raised by an analyst about Elon Musk's recent bid for OpenAI and political activities.
Analyst Perspective:
Oppenheimer analyst Colin Rusch views Musk's pursuit of OpenAI as a "distraction" for Tesla, especially given the company's current challenges. Rusch also highlighted the significant discount in Musk's offer compared to OpenAI's previous capital raise.
Musk's Lack of Attention and Political Stances:
Rusch expressed concern over Musk's potential lack of attention to Tesla due to his bid for OpenAI and his growing role in the Trump administration. He noted that Musk's political activity and association with the far-right AfD party in Germany have led to a decrease in Tesla sales in the EU.
Sales Decline:
In addition to the EU, Tesla has also faced declining sales in China, with BYD's aggressive pricing and XPeng's incentives putting pressure on the market. Tesla's recent January sales also fell in France, Norway, and the UK.
Impact on Consumer Sentiment:
Stifel analyst Stephen Gengaro pointed to a decline in Tesla's favorability rating, citing Musk's polarization with the Trump administration and his efficiency efforts. This negative sentiment is impacting Tesla's sales, according to Gengaro, as consumers become less willing to purchase vehicles.
Tesla's Performance:
Tesla reported delivering 495,930 vehicles globally in Q4 2024, missing analyst estimates. This marked the company's first year-over-year decline in deliveries.
Analyst Rating:
Oppenheimer maintains a "Perform" rating on Tesla but does not currently have a price target on the stock. Rusch emphasized the risks to Tesla's consumers and employees due to Musk's public persona and the Trump administration's actions.