Elon Musk groupies might fantasize about owning robo-taxis that yield a fortune in passive income while they stay home and play video games, but one stock market analyst warns that the “Tesla dream” risks transforming into a bitter nightmare.
Analyst Warns That Elon Musk’s ‘Dream’ Faces a Dark Reality
Boris Schlossberg, managing director at BK Asset Management, told CNBC that TSLA shares are a “very, very speculative” investment now that fanboys (and girls) who drank the Tesla Kool-Aid have finally begun to sober up to the stock’s deafening headwinds.
“I’ve been skeptical of this stock from the $300s and I remain very skeptical,” Schlossberg told the network. “I still think it’s a very, very speculative long at this point, primarily because right now the investors have really stopped buying the Tesla dream and are starting really to focus on the Tesla reality.”
Schlossberg explained that after years of overpromising and underdelivering, Tesla needs to put up or shut up. The firm has thus far failed that test, as demonstrated by its vicious first-quarter earnings miss.
“That’s where the company has really not been producing as well as I think the market wants to see. They certainly failed in Q1, they’re guiding higher for Q2 and we’ll see if indeed that will be the case, but overall they’re facing execution problems,” said Schlossberg.
Tesla Stock Recoils as Starry-Eyed Investors Sober Up
Already, Tesla stock has plunged nearly 25% in 2019, a collapse that could have been even worse had the overall market not experienced a historic recovery over the same period.