Tesla Inc. shares slid Monday to extend their losses to a fifth trading session, after J.P. Morgan slashed its stock price target to $195 from $308, putting it back where it stood on Aug. 8, before Chief Executive Elon Musk’s now famous going-private tweet.
Analysts led by Ryan Brinkman had boosted their price target after that tweet, which said Musk was considering taking the company private at $420, with “funding secured.”
As Marketwatch explains in the attached article funding does not appear to have been secured.
That’s a problem for about a million reasons.
Everyone’s ears should have perked when they heard that Musk would take Tesla private at $420. At that point I was reasonably sure something mind altering might be a factor. “420” is generally code for cannabis, for those who don’t know. Though it looks like Musk blamed his ill advised tweet on Ambien, not weed, one has to wonder what is going on out in Muskland. The board of Tesla is certainly concerned.
Tesla, as we always must point out is founded on crony capitalism. It needs taxpayers to subsidize it for it to survive. This is a tenuous position for a company, even one based in California. Faults are papered over to satisfy politicians and other “stakeholders.” As such while crony companies on the one hand enjoy the largess of the state, relying on cronyism to make ends meet can decrease a company’s resiliency under the right conditions. Tesla appears to be in the midst of such conditions.