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Dan Ives of financial services provider Wedbush Securities said on Wednesday that the bearish sentiment on Tesla was exaggerated.
The board should do three things to get the stock going again, Ives said.
These changes, along with an improved financial outlook, could send Tesla shares up 77 percent within twelve months.
This is a machine translation of an article from our US colleagues at Business Insider. It was automatically translated and checked by a real editor.
The falling stock market prices surrounding Tesla shares are overvalued and the shares could rise by 77 percent in the next twelve months. At least this is the opinion of the analysts led by tech economist Dan Ives from the financial service provider Wedbush Securities. They write: “We believe the stock is overshooting on the negative front as demand for Tesla stabilizes through 2024. Price cuts are easing, battery costs/production are showing strong cost efficiencies, and the Tesla Model 2, a sub-$30,000 vehicle, is on the horizon for next year.”
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Not everything is going smoothly for Tesla at the moment: demand for electric vehicles is weak, an arson attack temporarily shut down the factory in Grünheide and there is anger over Elon Musk’s compensation package. A judge in the US state of Delaware declared the CEO’s $55 million salary package invalid in January, proving right a shareholder who thought it was excessive.
Nevertheless, Ives reiterated that he sees the share price rising to $315 (288 euros) in the next twelve months. Tesla closed on Tuesday at $177.54, 162.48 euros, and on Wednesday at 154 euros. To weather the excitement around the stock and start the recovery, Ives says there are three things Tesla’s board can do.
The board can do this to give the stock a bullish boost again
First, he should work out a new compensation package for Musk that is larger than the one he received in 2018, which shareholders can vote on at their meeting in May.
Second, the board’s new compensation package should increase Musk’s voting share to 25 percent – a desire Musk has expressed – and also let shareholders vote on it in May.
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Eventually, Ives said, the company should move its headquarters to Texas, where it is also headquartered. That would pave the way for the board to approve the new compensation package and bypass the Delaware decision. A step that Musk has advocated for since the court decision.
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These changes, along with an improved production outlook and price reductions, would bode well for the electric car maker. “Now is NOT the time to throw in the towel on Tesla…we remain very confident at current levels despite the dark black clouds that are forming,” Ives wrote.
Read the original article Business Insider.