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Tesla stock sinks after Elon Musk calls share price 'too high' in tweet

Analysts at Baird gave the firm a $700 price target in response to the remarks, which aren't a new phenomenon for Musk

Elon Musk
Tesla previously withdrew its 2020 guidance amid the coronavirus pandemic, and Elon Musk stoked controversy on the company's earnings call by calling shelter-in-place restrictions 'fascist'

Tesla Inc (NASDAQ:TSLA) stock tumbled Friday afternoon when CEO Elon Musk weighed in on Twitter with an unusual take: The company’s share price is too high.

Investors were quick to take his word for it, dropping the stock 9.7% to US$706.30.

This isn’t the first time the often erratic Musk has offered seemingly counterintuitive opinions on social media. In an analyst note published Friday, Baird responded to the tweet by tagging the electric car producer with a Neutral rating and a US$700 price target. 

READ: Tesla profit beats forecasts but Musk lets rip at 'fascist' coronavirus shutdown

In its report, Baird highlighted four previous times Musk spoke out critically of the firm’s high market cap. The most damning post came in 2013, when a tweet that read “Stock price that we have is more than we have any right to deserve,” cost shares 30% of their value over the next 30 days.

Musk’s tweeting was supposed to be reined in, Baird noted, after a 2018 settlement between Tesla and the SEC called for increased oversight of Musk’s use of the platform. Tesla planned to put in place procedures to monitor the account, as well as Musk’s blog posts. 

Adding to the company’s uncertainty is the coronavirus (COVID-19) pandemic. Tesla beat first quarter expectations, but Baird pointed to significant question marks over the next two to three quarters as the company endeavors to restart production amid a potential recession or depression.

Tesla, for its part, withdrew its 2020 guidance and Musk himself made headlines by referring to shelter-in-place orders as “fascist.”

Contact Andrew Kessel at [email protected] 

Follow him on Twitter @andrew_kessel

Quick facts: Tesla Inc

Price: 1452.71 USD

NASDAQ:TSLA
Market: NASDAQ
Market Cap: $270.73 billion
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