There are more reasons behind Tesla’s (TSLA) plunging stock price than Elon Musk’s focus on Twitter, according to Wells Fargo auto analyst Colin Langan.
“It’s very concerning about the weakness that we’re seeing in China,” Langan said on Yahoo Finance Live (video above). “We are seeing incentives go up, and sales are actually not increasing there. And [a] driving concern is: Are we going to start seeing that in the US and Europe? Is that just sort of the early days of softening demand? And I think that is really more of the large institutional investors’ top concern.”
Shares of the EV maker are down about 67% from a peak in November 2021 — the stock’s largest drawdown since its market debut in 2010 — and down 26% so far this month alone.
Most of the losses for Tesla investors started after Elon Musk offered to buy Twitter in April, a deal that closed in late October and is perhaps just as concerning among investors as slowing global sales.
And the chaotic news flow surrounding the Tesla CEO has shown no signs of resilience.
“Should I step down as head of Twitter? I will abide by the results of this poll,” Musk tweeted to his 122.1 million followers on Sunday.
The poll closed on Monday morning, with 57.5% of the 17.5 million votes choosing “Yes” — though Musk hasn’t disclosed whether he would, in fact, step down.
Tesla stock opened higher on Monday amid hopes that Musk would leave his post on Twitter, but shares ended Monday’s session down slightly, mirroring the broader market.
The stock continued to fall Tuesday, dropping by more than 5% in afternoon trading, after Evercore ISI analyst Chris McNally slashed his price target on the stock to $200 from $300, joining bearish takes in the past week from Goldman Sachs, Wedbush, and Oppenheimer .
Langan, who maintains an Equal Weight rating (Neutral/Hold equivalent) on Tesla stock, agreed that the situation on Twitter with Musk needs to be carefully watched by investors.
“Everyone has seen that Elon could multitask, so that is not something traditional institutional investors are that concerned about,” Langan added. “But I do think there is a rising concern about potential brand damage from some of the headlines that are coming around the Twitter situation.”
Click here for the latest trending stock tickers of the Yahoo Finance platform
Click here for the latest stock market news and in-depth analysis, including events that move stocks
Read the latest financial and business news from Yahoo Finance