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One longtime Tesla (TSLA) shareholder is looking for reasons to believe in the company given the criticism it is receiving from all sides.
But he acknowledges it’s becoming hard to keep faith in Elon Musk’s electric car maker.
“[I] “There’s concern that Tesla’s best days may be behind it,” Ross Gerber, CEO of Gerber Kawasaki Wealth & Investment Management, told Yahoo Finance editor-in-chief Brian Sozzi on the Opening Bid podcast (watch the video above or listen to the video below).
Gerber recently said he had pared down his Tesla stake to 266,000 shares, valued at about $50 million, after reportedly holding 420,000 shares last year and expressing optimism about the company.
A former highly active poster on Twitter X said he invested heavily in Tesla in 2018 and 2019, when “things were really tough. [Elon Musk] “I invested when no one else was,” he says, “and it’s paid off for me.”
But that was back then, and Musk has since called Gerber an “idiot” for frequently raising concerns about X’s operations.
As Musk pivots to building humanoid robots at Tesla, reviving X and launching rockets with SpaceX, Gerber worries the billionaire is missing out on opportunities at Tesla, putting Tesla shareholders like himself at risk.
“Elon is not focused on building Tesla,” Gerber said.
Meanwhile, Tesla’s fundamentals are deteriorating.
The company reported second-quarter results in late July that showed lower-than-expected profits but better-than-expected sales, with vehicle deliveries of 440,000 vehicles only slightly ahead of market expectations.
Gerber believes Tesla will face tough quarters over the next few quarters.
The used car market is currently “flooded” with slow-selling Teslas because “CEOs now own Teslas.” [X]” Garber warned.
Tesla shares are trading at $213, down from their 52-week high of $278.98 but higher than the lowest price of $138.80 during the same period.
Musk’s shift to support former President Donald Trump has also soured sentiment toward Tesla’s stock price.
Gerber said Musk’s close relationship with Trump has done the company little favor, calling Trump “the worst thing for Tesla” because he won’t help sell cars.
Trump’s proposed policies, such as eliminating the $7,500 EV tax credit and supporting the oil industry, are “antithetical to the Tesla concept,” Garber said, adding that if Musk gets a cabinet position in a second Trump administration, “it will be because of Twitter.”
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Musk and Trump “want to control the speech on Twitter,” he said, “and that’s why they’re in a relationship.”
To be sure, Musk and Tesla still have an incredibly loyal retail investor base that remains unfazed by the daily volatility of news.
“I strongly believe this [stock] It can be $5,000 or $10,000. [long-term] “Once people understand what Tesla is, the stock will go up,” said Alexandra Mertz, a private investor and Tesla shareholder who is a former financial adviser and now CEO of L&F Investor Services, during the opening bid.
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For Mertz, there are two main reasons why Tesla’s stock remains undervalued.
First, the market has not properly factored in the profitability that the company’s humanoid robot, Optimus, will generate from its widespread long-term adoption.
These robots have their skeptics, including former head of Meta AI Jerome Pesenti: “Sometimes you just have to call it what it is, right? I mean, have you ever seen a robot like this? [robot] “What does that do? That’s bullshit,” Pesenti said in his opening bid.
Second, Tesla’s AI is a competitive advantage that could give it an expanded advantage over auto rivals such as General Motors.
Gerber believes Tesla’s reliance on its Optimus robots has gone too far and shouldn’t be a factor in any rational analysis of the stock’s price.
“The thing that bothers me the most is that Elon Musk built a robot in my house,” Gerber added.
Three times each week, Yahoo Finance Editor-in-Chief Brian Sozzi hosts insightful conversations and chats with luminaries from business and markets on Opening Bid. Watch additional episodes on our video hub or on your favorite streaming service.
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