Tesla Shares Reportedly Sold Out by Renowned Investor - Is a Similar Exit Advisable?
Slaying It: Tesla's Traps and Tricks
Struggling to figure out where to put your hard-earned cash? Look no further, my friend! ‘Tis the season for hot tips, and we’ve got the inside scoop on one unstoppable force taking the market by storm - Tesla, baby! With a market cap of $1.11 trillion, this electric vehicle titan is one of the most influential companies on the global scene. And yet, despite trading near all-time highs in late 2025, the volatile stock has since nosedived nearly 30% from its peak. But fear not, we're here to cut through the noise and help you decide if Tesla's the right ticker for your portfolio.
Go Beyond the Headlines
Don't be a wallflower! Dive deeper into the action with our website's Active Investor newsletter, unveiling insights that will set you apart from the crowd. Let's explore the bullish and bearish case for Tesla.
🐸 The Frog Prince: The Bear Case for TSLA Stock
The data doesn't lie! European deliveries plummeted 50% year-over-year in January 2025, with poor performance in Germany and France. It's been downhill ever since, with China—a crucial market for Tesla—showing signs of concern. In early May, weekly deliveries took a nosedive 69% to a mere 3,070 vehicles, even with heavy discounting and 0% financing offers. Exports from China are also decreasing, contradicting the theory that domestic weakness stems from an export focus.
Competition, much like a game of chess, is constantly changing. In China, BYD has been gaining ground with cheaper, more competitive models, leaving Tesla struggling to keep its head above water in terms of profitability. Tesla barely breaks even in China after factoring in subsidized financing, with margins potentially turning negative if sales continue to decline.
Quality control remains a problem, with the Cybertruck undergoing its eighth recall in just 14 months. Tesla is also in a bit of a pickle when it comes to autonomous driving tech, lagging behind Waymo. To top it off, political dynamics create additional hurdles, as CEO Elon Musk's controversial actions have sparked consumer backlash, protests, and damage to the brand.
Cheerio, old chap! Managing Partner at The Future Fund LLC, Gary Black, sold his remaining Tesla shares for the first time since 2021. Black pointed to Tesla's concerning 188x price-earnings ratio (at the time of his note), declining earnings estimates, and weak delivery performance as reasons for his decision to jump ship. He predicts Tesla's Q2 and full-year 2025 deliveries will drop 12% and 10% respectively, worse than the 7% and 5% estimates from Wall Street. Black has a 6-12 month price target of $310 based on projected 2030 volumes of 5.4 million units and adjusted EPS of $12.
But Wait, There's More!
Tesla is wrestling with operational and strategic headwinds on multiple fronts, as revealed during its Q1 earnings call. Factories are undergoing complex changeovers, delivering blows to the overall performance, and protests and vandalism targeting Tesla vehicles and facilities have hampered certain markets. New tariffs on Canadian and Mexican components will put additional pressure on profitability. Despite these challenges, management is holding firm to ambitious autonomous vehicle timelines and production targets.
So, what's the bottom line? The gap between Tesla's sky-high valuation and the deteriorating performance in key markets suggests the potential for downside risk. Out of 41 analysts covering Tesla stock, 18 have at least a "Buy" or "Strong Buy" recommendation, while 13 analysts rate TSLA as a "Hold" and 10 have a "Strong Sell" rating. The average target price for TSLA stock is roughly $290, representing a decline of over 15% from current levels.
Remember, it's all about making smart investment choices that'll help you Liz-quidate! 😊
Sources:1. Barron's - Tesla Analyst Calls2. CNN Business - China Deliveries for Tesla Plummet3. CNBC - Tesla Recall4. MarketBeat - Tesla Analyst Ratings5. Seeking Alpha - Tesla Analyst Consensus
Investing in Tesla's stocks requires a thorough understanding of the market and its challenges. The company's financial performance has been uncertain, with decreasing deliveries in key markets like Europe and China, increasing competition from companies like BYD, and quality control issues with new models like the Cybertruck. Despite these issues, some analysts still recommend Tesla as a potential investment, with an average target price of around $290. On the other hand, technology and finance news reports suggest potential downside risk due to the gap between Tesla's high valuation and its deteriorating performance.
