Another whirlwind week for Tesla Inc (Nasdaq: TSLA) finished off with an 8.9 percent sell-off on Friday following an emotional new interview by CEO Elon Musk and reports that the U.S. Securities and Exchange Commission is investigating Musk’s motives for announcing a potential deal to take Tesla private. Analysts say the market’s negative reaction to the interview could serve as a wake-up call for Musk.
On Thursday, the Wall Street Journal reported that sources familiar with the matter say the SEC is investigating whether or not Musk misled investors by tweeting on Aug. 7 that he had “funding secured” for a privatization deal worth $420 per share. Tesla stockinitially spiked following Musk’s tweet, but it is now trading significantly lower than it was prior to the tweet as Wall Street analysts have questioned both the viability of Musk’s proposal and Musk’s personal credibility.
Musk’s emotional interview with the New York Times published on Friday didn’t help his cause. The Times said Musk “alternated between laughter and tears” during the interview, and Musk said the past year has been “the most difficult and painful year” of his career. Musk said he has worked 120-hour weeks and that friends have been “really concerned” about his health.
Musk also said he’s preparing for “at least a few more months of extreme torture from the short-sellers,” which he referred to as “not dumb guys” but “not super-smart.”
Finally, Musk said he now needs prescription drug Ambien to sleep, and Tesla board members have acknowledged that Musk uses unnamed “recreational drugs” as well, according to the report.
Wall Street analysts say there’s a lot of moving parts and uncertainty surrounding TSLA stock and Musk.
Loup Ventures analyst Gene Munster says investors are concerned about Musk’s mindset and potential drug use. “While concerns about Musk’s stability aren’t surprising given the article, we believe it could be a turning point for Musk to get some help and help himself, which will be a net positive to the companies he’s building,” Munster says.
Contrary to Musk’s claims, Munster says Tesla investors have nothing to fear from short sellers.
“The shorts are…
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