Ross Gerber said he's ditching his Tesla over Elon Musk's antisemitic posts.

Ross Gerber said he’s ditching his Tesla over Elon Musk’s antisemitic posts.Leon Neal/Getty Images and Emma McIntyre/Getty Images

  • Tesla’s flagging stock price can rebound if CEO Elon Musk changes his behavior or is replaced, veteran investor Ross Gerber told Yahoo Finance.

  • Musk’s behavior on X, formerly Twitter, has turned him into the “devil of advertising,” Gerber said.

  • His comments follow a recent Tesla stock downgrade from Wells Fargo, which lowered its price target to $125 a share.

In order to fix Tesla’s steep stock decline, CEO Elon Musk must either change his behavior or be replaced, long-time investor Ross Gerber told Yahoo Finance.

“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,” he said.

The electric vehicle maker has tumbled more than 36% year-to-date, a plunge that’s emerged amid disappointing earnings, a lackluster product lineup, and broader market headwinds.

On Monday, Wells Fargo slashed the company’s price target to $125 a share, implying a 23% drop from current levels. The bank characterized Tesla as a “growth company with no growth,” and expects earnings per share to come in 32% below estimates for this year.

For investors such as Gerber, frustration over Musk’s leadership and public behavior is peaking. This has become a point of contention ever since the CEO’s purchase of X, formerly Twitter.

Whereas in the past Musk’s popular tweets about Tesla effectively saved the company money on marketing, his behavior on the social media platform has more and more become a source of controversy that’s hurting the carmaker, Gerber has often pointed out.

In fact, Musk’s interaction with an anti-semitic post last November caused Gerber to announce he would replace his Tesla model Y with a Rivian, Tesla’s competitor. It’s a stark comment from an investor who once sought a seat on the company’s board.

“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,” he told Yahoo on Thursday.

More discouraging are Musk’s plans to develop artificial intelligence initiatives separate from Tesla, taking away from the company’s ability to enhance its dominance in tech.

Meanwhile, Tesla enthusiast Dan Ives of Wedbush Securities considers investors’ bearishness to be overdone, suggesting that the EV-maker’s stock could bounce back 77% in 12 months.

To achieve this, Ives emphasized that Musk’s compensation package should be improved, while his control of shares should be raised.

Read the original article on Business Insider


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