Tesla stock price largely based on ‘hype’ and ‘pixie dust,’ venture capitalist says

investors are learning a painful lesson that Tesla’s stock price is valued on Elon Musk’s pomp and circumstance, plus the automaker’s fundamentals.

“Is Tesla a great company producing a great car? Absolutely. Is Tesla worth what General Motors or Ford or Toyota should be? Absolutely not,” said the veteran venture capitalist. Bradley Tusk said on Yahoo Finance Live (video above). “So much of Tesla’s stock price is built on the hype and pixie dust that Elon Musk is so good at putting out. When he risks puncturing that image, it reflects not only on Twitter, but also on Tesla, SpaceX and everything else he’s doing.”

All eyes remain fixed on what is happening with Tesla’s stock price in the middle Musk’s tumultuous takeover of Twitter. And over the course of 2022, Musk has dumped about $23 billion worth of Tesla stock despite vowing months ago that he wouldn’t sell any more.

Shares of the electric vehicle maker are down 20% so far this month, according to data from Yahoo Financeand is down more than 55% so far in 2022.

This photo was created by Yahoo Finance using the Dall-E image generator. (Open AI)

Analysts point to several factors behind the drop in Tesla’s Teflon stock price.

First, the risk of operational failure at Tesla has increased as Musk focuses on restructuring Twitter. Goldman Sachs recently took a more cautious stance on Tesla shares, saying Musk’s ownership of Twitter has become “polarizing” and a cloud over the shares.

Concerns also linger over Tesla’s manufacturing issues and pace of sales in China amid a uncertain focus of COVID-19 policies.

By last, competition in the EV space in the United States it has only intensified this year, raising the risk of slowing growth for Tesla in 2023 and beyond.

“It’s a brutal spiral that Musk has caused with fears that he will sell more shares by putting pressure on the name along with concerns about demand,” Tesla Observer. Dan Ives he told Yahoo Finance. “It’s a Ted Striker Airplane movie vibe right now with Musk and Tesla with their full attention seeming to be on Twitter for now.”

Brian Sozzi is a general editor and anchor on Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and in LinkedIn.

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